Oil prices exceed $100 per barrel, impacting Dominican Republic economy

Global oil prices have risen above $100 per barrel, with Brent crude closing at $107.63 and West Texas Intermediate reaching $102.48. This surge follows a lack of progress in normalizing navigation through the Strait of Hormuz.

The price spike poses a significant economic threat to the Dominican Republic. The country consumes approximately 144,000 barrels per day, meaning every $1 increase per barrel represents an additional monthly exposure of roughly $4.4 million. If prices remain at current levels, the annual additional exposure could reach approximately $2.24 billion.

This volatility impacts the national budget, which was prepared based on a projected oil price of approximately $65 per barrel. The current Brent price represents a 65.6% increase over that projection. The escalation is expected to increase import costs, necessitate higher government subsidies, and exert pressure on transportation and electricity prices.