Dominican Republic's energy bill climbs $900 million amid oil price surge from Iran war

The Central Bank of the Dominican Republic projects the country's 2024 energy bill will total about US$5.4 billion, roughly US$900 million higher than earlier forecasts. The increase stems from a sharp rise in global oil prices after the United States and Israel launched a conflict against Iran, which has constrained supply through the Strait of Hormuz, a route that carries about 20 % of world oil.

Inflation reached 5.11 % year‑on‑year in April, exceeding the central bank’s 4 % ± 1 % target range. The bank expects inflation to settle around 4.5 % by year‑end as the shock is seen as temporary and markets anticipate a gradual normalization of oil supply. Futures pricing suggests crude will fall below US$80 per barrel by late 2027.

Despite the external pressure, the Dominican economy retains solid fundamentals: 4.1 % growth in the first quarter, foreign reserves above US$15.8 billion, and strong performance in gold exports, remittances, tourism, and foreign direct investment. The central bank left its policy rate unchanged and postponed a US$46 billion liquidity facility to January 2027 to safeguard financial stability.