On February 28, 2026, US-Israeli strikes on Iran disrupted approximately 20% of global LNG supply through the Strait of Hormuz. The European gas benchmark TTF surged roughly 48%. Urea prices jumped from US$482 to US$720 per tonne. Ammonia moved from US$495 to US$600.
Energy Minister Moonilal acknowledged that higher prices "could boost T&T revenues." He was careful with the word "could." The Central Bank, in its March Monetary Policy Announcement, warned that the war "added further downside risks to projected global economic activity." Former PM Stuart Young said the cost of living would increase from shipping disruption.
All three statements are true simultaneously, and together they describe a paradox that defines Trinidad and Tobago's current economic position.
The Windfall That Cannot Be Captured
Trinidad and Tobago has spare LNG liquefaction capacity at Atlantic LNG. The four-train facility was designed for a gas supply that no longer exists at current production levels. Train 1 has been permanently decommissioned. An outage from mid-February 2026 knocked out approximately 25% of remaining output.
The country is positioned to benefit enormously from high gas and petrochemical prices. But it cannot increase production to capitalise. Gas output has fallen from 4 bcf/d at peak to 2.5 bcf/d. The plants are there. The markets are paying record prices. The gas is not.
Meanwhile, Nutrien - one of the largest ammonia producers at Point Lisas - has been shut down since January. The price spike in ammonia and urea benefits producers. Trinidad and Tobago, which should be one of the primary beneficiaries, has taken one of its major producers offline over a contract dispute.
The Import Cost
The same disruption that raises export prices also raises import costs. Trinidad and Tobago imports food, manufactured goods, machinery, and consumer products. Shipping disruption through the Strait of Hormuz and elevated insurance premiums for maritime trade routes increase the cost of everything that comes into the country.
For a population already dealing with forex rationing, credit card limits of US$100 to US$200 per month, and a black market exchange rate above the official TT$6.80, higher import costs compound an existing squeeze. The windfall from higher energy prices arrives in the government's accounts. The increased import costs arrive in the grocery store.
The net effect depends on the balance between export revenue gains and import cost increases. No public analysis has been conducted to determine which effect dominates. The answer likely varies by income level: higher-income Trinbagonians with greater exposure to energy sector employment and investment benefit from the revenue side. Lower-income households, which spend a higher proportion of their income on food and consumer goods, absorb the import cost side.
What the War Reveals
The Middle East conflict did not create Trinidad and Tobago's energy production decline or its import dependency. It illuminated both simultaneously.
A country with robust gas production would be celebrating. Higher prices on higher volumes would deliver a revenue windfall that could close the fiscal gap, rebuild forex reserves, and fund the infrastructure commitments in the budget. Instead, the price spike arrives at a moment of production decline, plant shutdowns, and an LNG facility operating below capacity with a decommissioned train.
The window of high prices may last months or years - Middle East conflicts have historically sustained elevated energy prices for extended periods. But Trinidad and Tobago's ability to benefit depends on production recovery, which depends on the 2027 projects that are still under development.
The paradox is complete: the best commodity price environment in years, arriving at the worst production moment in decades, in an economy that needs the revenue more than it has in a generation.