Guyana, a South American nation with a population of approximately 840,000, has emerged as a notable oil producer in the global energy landscape, producing nearly one million barrels of oil per day (bpd). This rise is part of a broader shift in global oil flows driven by regional producers in the Americas, Africa, and elsewhere seeking to provide alternative sources of energy amid ongoing instability in the Middle East, particularly following the closure of the Strait of Hormuz.
The Strait of Hormuz, a critical chokepoint for global oil shipments, has been a source of vulnerability due to geopolitical tensions involving Iran. The closure of the strait recently triggered a major energy shock, the most significant since the 1973 Yom Kippur War, when oil prices quadrupled. Today's market dynamics, however, differ substantially. The United States has transitioned from an energy importer to a leading exporter, thanks to technological advances like hydraulic fracturing and expanding production elsewhere, helping to mitigate the impact of disruptions at the strait.
Alongside the United States and Brazil, countries including Argentina, Canada, and Guyana form what is informally known as the ‘Americas Quintet,’ a group driving non-OPEC oil supplies in the Western Hemisphere. Canada's proven reserves stand at 163 billion barrels, ranking it as the world’s fourth-largest producer. Argentina’s oil production, approaching one million bpd, is largely supported by fracking, while Brazil’s offshore deepwater drilling yields approximately three times Argentina’s output. These developments have enabled major consumers like China and India to source crude directly from Latin America, circumventing routes passing through the Middle East.
Africa’s west coast is experiencing a similar resurgence in oil production potential, driven by new discoveries and increased global demand amid the Persian Gulf crisis. Traditional producers such as Libya, Nigeria, and Angola continue to hold leading positions, but emerging players like Namibia and Ivory Coast are attracting investment. Namibia’s recent offshore discoveries could yield up to 20 billion barrels, while the Baleine Field in Ivory Coast, discovered in 2021, is estimated to hold 2.5 billion barrels. Other West African nations like Senegal, Liberia, and Congo are also developing new reserves.
Despite these expansions, African and American oil reserves remain smaller compared to Middle Eastern giants such as Saudi Arabia, Iran, Iraq, and the United Arab Emirates. However, a significant strategic advantage lies in the more secure and accessible Atlantic and Pacific shipping routes. Oil exports from ports in Vancouver, Argentina, and Tanzania avoid the risks posed by missile or drone attacks and prolonged port blockades that threaten vessels transiting the Strait of Hormuz.
Major Asian importers—including China, India, and Japan—along with European nations, have increasingly turned to African oil supplies. The European Union currently imports about 20 percent of its oil from Africa, exceeding its imports from the Gulf. High demand, especially from Asia, has maintained elevated oil prices throughout the year. After recent speculation regarding a possible re-opening of the Strait of Hormuz, benchmark oil prices fell from around $90 to $80 per barrel, still above last year’s levels.
In response to the ongoing threat to Gulf oil exports, regional states such as Saudi Arabia and the United Arab Emirates are investing billions in infrastructure projects designed to bypass the strait. Efforts include upgrading existing pipelines and constructing new ones to the Red Sea and Gulf of Oman ports. These efforts have increased pipeline export capacity to approximately 8.5 million bpd, although this remains less than half the volume that normally transits Hormuz.
Several pipeline projects are under consideration, including reopening the damaged Kirkuk-Baniyas route in Syria, constructing a pipeline from Basra to Turkey's Ceyhan port, and connecting Basra to the Jordanian port of Aqaba. A recent analysis by Goldman Sachs suggests that by 2028, new pipeline routes could handle about 60 percent of the oil previously shipped through the Strait of Hormuz.
However, these alternative routes present challenges. Tankers navigating the Red Sea remain exposed to potential attacks from Iran-aligned Houthi militia in Yemen, prompting marine insurers to expand the high-risk zone in that region. Additionally, rerouting Gulf oil shipments around Africa or through the Mediterranean increases transit times and costs, complicating delivery to primary Asian markets that rely heavily on Gulf supplies.
Broader shifts in the global energy sector—including growing investment in nuclear power, accelerated renewable energy adoption, and the emergence of new oil producers—are reshaping geopolitical dynamics. While Gulf states continue to play a central role, the diversification of supply sources strengthens energy security for consumers and reduces vulnerabilities posed by regional conflicts. The current tensions in the Gulf have reinforced the urgency for countries to pursue more stable and varied energy supplies, following the earlier disruptions caused by conflicts such as the war in Ukraine.