• Guyana is seen as a more attractive oil investment destination as Venezuela works through a sovereign debt restructuring process that analysts say could take years to complete, according to an S&P Global analysis published on May 20. 
• The report examined Venezuela’s plans to restructure sovereign debt and obligations tied to state oil company Petróleos de Venezuela, S.A. (PDVSA), and how they could gradually improve investor confidence in the country’s oil sector, despite ongoing challenges. 
• Analysts noted that Venezuela remains among the world’s highest-risk oil and gas investment jurisdictions, with Texas-based energy attorney Ted Borrego saying major international operators may continue favouring more stable opportunities such as Guyana.  “The big guys? There are so many other places that they can make money that going back to Venezuela is going to be a real stretch… There are a lot of places in Latin America that are much more attractive, e.g., Guyana, just next door, or in the rest of the world that don’t have the problems inherent in Venezuela,” Borrego said. 
• John Haley, a partner at Nelson Mullins law firm, said the process of restoring investor confidence and restructuring debt will likely happen at the same time rather than sequentially. “Can everything be repaid before operators go back in? It’s just not feasible… So, I think it’s something that needs to be done on parallel tracks,” Haley said. 
• However, Philip Luck, director of the economics program at the Centre for Strategic and International Studies, said debt restructuring alone will not be enough to unlock large-scale investment. “Venezuela still faces significant challenges in its physical infrastructure, human capital, and the governance of both the oil industry and the country at large. The sovereign’s liabilities are likely close to 200.0% of GDP. Past precedent puts the average time that restructurings of similar scale take at around 30 months,” Luck said.
• According to S&P Global Ratings analysts, Venezuela’s external debt burden is estimated at between US$150.0Bn and US$200.0Bn.
• The analysis noted that Venezuela’s oil production averaged 1.13 million barrels per day (b/d) in April, up 4.8% from March. PDVSA is targeting an output of 1.37 million b/d by the end of 2026 while updating production participation contracts under a revised hydrocarbons law. 
• In contrast, Guyana has emerged as a more stable and predictable oil investment destination, with offshore developments advancing under stable fiscal terms and without the debt, sanctions, and governance challenges facing Venezuela. 

(Sources: OILNow & S&P Global)

• Costa Rica is bracing for an extended El Niño event that meteorologists now expect to grip the country from June through the second half of 2026 and persist into the early months of 2027, prompting authorities to activate a national contingency plan covering water supply, electricity, agriculture and wildfire risk.
• The Instituto Meteorológico Nacional (IMN) has escalated its El Niño classification from “surveillance” to “advisory,” meaning forecasters now consider the development of the phenomenon highly likely rather than possible. The updated outlook is notably more severe than projections released as recently as April. The IMN now estimates rainfall deficits of up to 50 percent in some regions and temperatures running as much as 2 degrees Celsius above normal, compared with earlier estimates of 10.0% to 30.0% rainfall reduction and warming of 0.5 to 1 degree.
• “Those deficit conditions are now expected to be worse than they were a month ago,” Karina Hernández, head of the IMN’s Climatology Unit and director of the country’s ENOS Phenomenon Consultative Commission, said. She added that under the current outlook, “we would be under the effect of that El Niño throughout the second half of 2026 and possibly extending into the beginning of 2027.”
• The IMN forecast aligns well with the latest from the United States National Oceanic and Atmospheric Administration (NOAA), which puts the probability of El Niño persisting through February 2027 at 96.0%. The North American Multi-Model Ensemble favours El Niño developing within the coming month and continuing through the Northern Hemisphere winter of 2026 to 2027.
• The economic implications are already on the central bank’s radar. Banco Central de Costa Rica President Róger Madrigal López has indicated the country should expect an inflationary shock in early 2027 driven by El Niño’s impact on agricultural output and food prices. Reduced precipitation typically squeezes domestic production of staple goods, drives up the cost of livestock feed, and pressures the basic consumer basket.

(Source: Tico Times)

• The United States (U.S) said it launched new strikes on southern Iran on Monday, May 25, 2026, targeting Iranian missile sites and boats attempting to place mines. The strikes were in "self-defence" and designed "to protect our troops from threats posed by Iranian forces", U.S. Central Command (CENTCOM) said in a statement.
• Iran's Islamic Revolutionary Guard Corps (IRGC) said on Tuesday, May 26th, it had downed a U.S. drone and fired at a fighter jet and another drone that entered Iranian airspace, state media reported. It did not specify when this happened. It added that Iran had the "legitimate and definite" right to retaliate against any U.S. ceasefire violations.
• "U.S. forces conducted self-defence strikes in southern Iran today to protect our troops from threats posed by Iranian forces," CENTCOM spokesperson Captain Tim Hawkins said in a statement on Monday. "U.S. Central Command continues to defend our forces while using restraint during the ongoing ceasefire." Captain Hawkins added that the U.S. strikes targeted an area near Bandar Abbas, a southern port city and home of an Iranian naval base that sits on the Strait of Hormuz, according to the New York Times. Iranian state media had earlier reported that local officials in Bandar Abbas were investigating after explosions were heard.
• It is unclear what impact the latest U.S. strikes will have on any potential peace agreement between the U.S. and Iran. Following the U.S. attack, Secretary of State Marco Rubio said a deal was still possible and pointed to talks on Tuesday between Iran's top negotiator and foreign minister and Qatar's prime minister.
• "We'll see if we can make progress. I think it's a lot of talking back and forth going on about specific language in the initial document, so it'll take a few days," Rubio told reporters during an official visit to India. He said President Donald Trump had "expressed his desire to make it". "He's either going to make a good deal or no deal," Rubio said.
• Asked again later about Monday's strikes, Rubio said: "The straits have to be open. "They're going to be open one way or the other, so they need to be open. "What's happening there is unlawful, it's illegal, it's unsustainable for the world, it's unacceptable."

(Source: BBC)

• British shop price inflation sped up in May on the back of disruption and higher energy costs caused by the Iran ‌war, according to a retail industry group, which said the government had to do more to keep costs down.
• The British Retail Consortium's (BRC’s) monthly survey of major chains published on Tuesday, May 206, 2026, showed that ⁠prices in May were 1.2% higher than a year earlier, up from a 1.0% rise in April. Furniture and health and beauty products rose the most, reflecting rising raw material and shipping costs. However, food price inflation slowed to 2.7%, its lowest in a year, from 3.1%.
• BRC Chief Executive Helen Dickinson said the government, which ‌has ⁠pressed supermarkets to slow price increases and flirted with the idea of demanding price caps this month, had to play its part in bringing down costs for retailers. "Reducing ⁠the non-commodity charges, taxes and levies that make up more than two-thirds of energy bills, and cutting red tape would ⁠help keep inflation down," Dickinson said.
• Britain's broader official consumer price inflation index fell to 2.8% in April but ⁠is expected to rise again to around 4% in the coming months due to the energy price shock.

(Source: Reuters)

• On May 18, 2026, the World Bank (International Bank for Reconstruction and Development, or IBRD) priced a catastrophe (cat) bond that finances US$200.0Mn of hurricane insurance coverage for Jamaica, replacing the previous US$150.0Mn in cat bond coverage that was paid out to Jamaica following Hurricane Melissa in October 2025. The transaction was oversubscribed, allowing the World Bank to upsize the issuance from its initial target.
• The bond was issued under IBRD's "capital at risk" notes program (CAR 137), which enables member countries to transfer disaster-related risk to global capital markets. Under the transaction, the World Bank issues the notes and enters into a risk transfer agreement with the Government of Jamaica, which pays a premium based on the terms achieved in capital markets. The covered peril is a Named Storm, with a per-occurrence parametric trigger¹.
• The cat bond forms part of Jamaica's multi-layered disaster risk financing strategy, complementing budget reserves, contingent financing, and conventional insurance. The instrument is designed to absorb the fiscal impact of low-frequency, high-impact hurricane events, ensuring timely access to liquidity following extreme weather.
• Key terms include a settlement date of May 26, 2026 and a scheduled maturity of May 23, 2030. The issue price was at par, with the coupon set at Compounded SOFR plus a Funding Margin of 0.12% and a Risk Margin of 6.75% per annum.
• Investor distribution skewed heavily toward dedicated insurance-linked securities (ILS) capital, taking 69% of the issuance, asset managers 25%, and insurers/reinsurers 6%. Geographically, allocation was led by Europe (42%) and North America (41%), with Bermuda accounting for 16% and Asia/Australia 1%. The composition reflects the deep institutional pool that has developed around parametric sovereign cat bonds.
• By pre-funding up to US$200.0Mn of hurricane risk through capital markets, it preserves Jamaica's fiscal headroom (budget reserves, contingent credit lines, IMF/multilateral facilities) to respond to El Niño-related shocks, should they materialise alongside or independently of the 2026 Atlantic hurricane season.
• Following Hurricane Melissa, CAT bonds proved their worth, providing a rapid, transparent infusion of cash that bypassed the lengthy claims adjustment process typical of standard insurance. Because the bond utilised a parametric trigger, the US$150.0Mn payout was triggered automatically and disbursed within weeks of the storm.

_______________________

¹Bases the payout on objective physical data like central pressure and track location rather than a subjective assessment of damage.

(Sources: World Bank, Relief Web & NCBCM Research)

• On May 20, 2026, the Planning Institute of Jamaica (PIOJ) released preliminary estimates showing real GDP contracted by 5.9% in the January–March 2026 quarter relative to the same period in 2025. The decline was broad-based, with the Goods Producing Industry down 11.2% and the Services Industry down 4.1%, reflecting the lingering disruption from Hurricane Melissa and the early onset of cost pressures linked to the Middle East conflict.
• Within the Goods Producing industry, Mining & Quarrying recorded the steepest decline at -26.6%, followed by Agriculture, Forestry & Fishing at -20.3%, Manufacturing at -7.7%, and Construction at -1.3%. The Mining contraction extends the -37.5% drop posted in Oct–Dec 2025, reflecting continued disruption to alumina and bauxite production in the wake of the hurricane. Declines in Agricultural output were sharpest in the western parishes, with St Elizabeth (39.9%) and Hanover (38.1%) bearing the brunt of post-hurricane crop damage. Agricultural output in St. Thomas also saw a steep decline of 27.2%.
• Within the Services industry, Accommodation & Food Service Activities fell 20.4% (an improvement from -31.0% in Oct–Dec 2025 but still deeply negative), Electricity, Water Supply & Waste Management declined 10.3%, Information & Communication contracted 7.1%, Transport & Storage fell 5.4%, and Education, Health & Other Services declined 5.2%. Only two sub-industries posted growth: Public Administration & Defence (+1.9%) and Financial & Insurance Activities (+1.8%), the latter reflects the sector's relative insulation from the physical shock.
• For the full Fiscal Year 2025/26, the economy is estimated to have contracted by 1.7%, with Goods Producing down 2.2% and Services down 1.5%. The annual contraction was driven by Mining & Quarrying (-16.0%) and Accommodation & Food Service Activities (-10.9%), partially offset by Financial & Insurance Activities (+3.1%), Public Administration (+1.1%) and Construction (+0.6%).
• Labour market indicators have, however, remained resilient. As of January 2026, the unemployment rate stood at 3.6% (down from 3.7% in January 2025), with youth unemployment improving to 10.7% from 12.3%.
• Preliminary high-frequency data for April 2026 point to continued near-term weakness, with airport arrivals down 22.5% and alumina production down 27.3% versus April 2025. The data confirm that tourism and alumina, two of Jamaica's principal foreign-exchange earners, remain materially impaired heading into the April–June quarter.
• Looking ahead, the PIOJ projects a further contraction of 3.0%–4.0% in April–June 2026, driven by ongoing geopolitical tensions in the Middle East and slow recovery in storm-affected industries. For Fiscal Year 2026/27, however, PIOJ forecasts growth in the range of 1.0%–3.0%, with all industries expected to expand as the economy recovers from the 2025 weather-related shock. This growth band is consistent with the Bank of Jamaica's own FY2026/27 projection.

(Source: Planning Institute of Jamaica)

• Trinidad and Tobago's (T&T’s) exports and overall trade profile are poised to benefit significantly from the surge in global energy prices since the onset of the United States (U.S.)-Iran conflict, with the current account surplus set to widen substantially from 4.7% of GDP in 2025 to 6.5% in 2026.
• Following 2025, which saw energy exports rise, more than offsetting a decline in non-energy exports, BMI expects T&T’s trade position to strengthen further in 2026. This will be driven primarily by surging energy exports, which accounted for 83.3% of total exports in 2025, positioning the country to benefit enormously from recent energy market developments. BMI also notes, however, that T&T’s primary income deficit will widen in 2026, as surging profits generated by foreign oil companies are repatriated, offsetting some of the overall boost to the current account. This mirrors historical trends, seen recently when oil prices rose in 2022.
• The expectation of increased energy exports in 2026 is based on two supporting factors: strongly favourable terms-of-trade support from the U.S.-Iran conflict and elevated energy prices, alongside the expectation that hydrocarbon production will rise in 2026 as newly operational fields ramp up output.
• Notably, BP's Cypre field, which opened in April 2025 and completed its seven-well drilling programme in December 2025, will support output gains. Q1 2026 LNG production data show a year-over-year output expansion in volume terms, and combined with supportive prices, this will help propel exports through the year as the conflict shows few signs of near-term abatement. Indeed, T&T’s trade profile is strongly correlated with energy prices, with a 1.0% increase in the Brent crude price associated with a 0.52% increase in goods exports in the current quarter and a 0.30% increase in the quarter ahead.
• Additionally, this development will have well-timed benefits for T&T’s external buffers. Strong earnings and soaring prices will help provide support for the country's currency regime and reserve position. Furthermore, expectations are that the Central Bank of Trinidad and Tobago will welcome this development, especially given that declining reserve levels may otherwise necessitate a rise in the policy rate to counter capital outflows – a negative development given soft domestic demand. In the near term, these pressures will be muted by the supportive external environment that will support reserves accumulation, which has risen in recent months.
• That said, risks to the outlook are heightened but balanced, driven primarily by uncertainty surrounding ongoing Middle East geopolitical strife. Should oil prices remain higher for longer than expected, T&T’s current account surplus and trade balance could outperform the forecast. Conversely, a quicker resolution to the conflict would represent a downside risk, as energy prices would likely fall back more rapidly than currently anticipated, weighing on the trade balance and buffers.

(Source: BMI, A Fitch Solutions Company)

• BMI continues to expect that the Dominican Republic (DR) economy will expand by 3.8% in 2026, after disappointing growth of just 2.1% in 2025. Data released in the year-to-date have been remarkably strong, with the monthly activity index consistent with a roughly 2.0% quarter-over-quarter (QoQ) increase in output after a relatively soft end to 2025 due in part to adverse weather events. This pick-up appears to largely reflect a reacceleration of activity in the construction sector, where the imposition of tighter migration controls and some public budget execution issues acted as headwinds in 2025.
• Meanwhile, a tight domestic labour market and continued robust performance for the tourism industry, which has been underpinned by steady increases in sectoral capacity, have helped to sustain steady growth in services, a trend that is expected to continue.
• While the DR is a net energy importer, the government’s decision to shield the private sector from much of the oil price shock stemming from the U.S.-Iran conflict will help to reduce the direct impact on the economy. This does raise some fiscal risks (the subsidies are estimated to cost the government between DOP1.0-1.5Bn a week, or .02% of GDP), but the hit to the public finances should be manageable with the deficit set to widen from 3.6% of GDP to 4.0%.
• In this scenario, BMI anticipates that inflation will remain close to the upper end of the BCRD’s (Banco Central de la República Dominicana’s) 3.0-5.0% target range, reducing pressure on the central bank to hike. With views for no Federal Reserve (Fed) hikes this year, BMI assumes the BCRD will hold its policy rate at 5.25% in 2026.
• Risks to the projections are broadly balanced. While BMI remains constructive on growth, embedded in its forecast is an assumption that a more challenging global backdrop contributes to a modest deceleration in economic activity over Q2 that may fail to materialise given the data available through March. On the other hand, expectations are that the Strait of Hormuz will reopen by mid-year, triggering a sharp drop in oil prices over the second half of 2026. If the Strait remains closed, oil prices could reach above US$150/bbl, raising the risk of a global recession and leaving the Dominican government with a difficult decision on whether to retain existing fuel price subsidies or phase them out and pass the cost to consumers.

(Source: BMI, A Fitch Solutions Company)

• Oil prices were volatile on Thursday, May 21, 2026, ultimately settling about 2% lower as uncertainty over prospects for resolving the U.S.-Israeli conflict with Iran weighed on the market. Brent crude futures settled at $102.58 a barrel, down $2.44, or 2.3%, while U.S. West Texas Intermediate (WTI) futures closed at $96.35, down 1.9%, their lowest in nearly two weeks.
• Earlier in the session, prices had surged as much as 4% after Reuters reported that Iran's supreme leader issued a directive that dented hopes for a swift resolution to the war. However, prices later reversed course as the market weighed mixed diplomatic signals.
• The report signalled that Tehran is hardening its stance on a key U.S. demand. The directive from Supreme Leader Ayatollah Mojtaba Khamenei could further complicate negotiations and frustrate U.S. President Donald Trump’s efforts to broker an end to the war.
• Gains accelerated after U.S. Secretary of State Marco Rubio said a proposed tolling system in the Strait of Hormuz would make a diplomatic deal unfeasible. However, prices later pared gains after he added that officials from Pakistan, which is acting as a mediator, will travel to Iran for talks.
• Iran also announced a new “Persian Gulf Strait Authority” to oversee a “controlled maritime zone” in the Strait of Hormuz. Further, Iran warned against further attacks and unveiled steps entrenching its control of the strait, which remains mostly closed. Before the war, the strait carried oil and liquefied natural gas (LNG) shipments equal to about 20% of global consumption.
• Notably, supply risks remain a major concern. The start of peak summer fuel demand, combined with the lack of new oil exports from the Middle East and depleting stocks, could push the oil market into the “red zone” in July-August, according to International Energy Agency (IEA) head, Fatih Birol. Even if the Middle East conflict ended now, full oil flows through the Strait of Hormuz would not return before the first or second quarter of 2027, according to Abu Dhabi ​National Oil Company (ADNOC) CEO Sultan Al Jaber.

(Sources: Reuters)

• British inflation cooled by more than expected in April, but the slowdown did little to mask a tough outlook for households, with global costs from the Iran war set to hit them harder later this year.
• Britain said on Wednesday, May 20, 2026, that it had secured a trade deal with the Gulf Cooperation Council (GCC) worth $5Bn a year in the long run, deepening economic ties with allies in a region dealing with the fallout from the Iran war.
• The deal with the GCC, which consists of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, comes after U.S.-Israeli strikes against Iran in February triggered Iranian attacks on other countries in the region, putting strain on energy and food supplies. At a time of increased instability, Britain’s Trade Minister Peter Kyle said the announcement sends a clear signal of confidence, giving UK exporters the certainty they need to plan ahead.
• The British government noted that the deal would be worth £3.7Bn each year in the long term, more than double a previous estimate of £1.6Bn, as the final deal went further on both trade liberalisation and service sector commitments than previously expected. In addition, it will remove 93% of GCC tariffs on British goods, equivalent to the removal of £580Mn worth of tariffs by the deal’s tenth year. Two-thirds of the tariffs will be removed as soon as the deal comes into force.
• Autos, aerospace, electronics, and food and drink are among the sectors expected to benefit, with cereals, cheddar cheese, chocolate, and butter all becoming tariff-free. In return, Britain has lowered tariffs to the GCC, though the countries’ main exports to Britain, oil and gas, are already tariff-free.
• On services, Britain locked in current access to the GCC so businesses could expand without facing new barriers, while Gulf countries can also grow their own service sectors through the deal. The agreement spans trade in goods and services, financial services, digital trade, investment protection, telecommunications, and other areas.
• However, the deal has drawn criticism from campaigners because it does not contain any language around human rights. Tom Wills, director of the Trade Justice Movement, said that by failing to negotiate enforceable human rights protections, the UK had taken “a moral step backwards.”

(Source: Reuters)