Geopolitics Drive Energy Prices

Geopolitics Drive Energy Surge in 2026, Global Markets Rally as Trinidad Assets hold firm.

April 18, 2026

Dave Dookie, Managing Director

• Energy markets volatile in 2026: Crude oil prices surged due to the Israel–Iran conflict and supply disruptions this year, while natural gas remained relatively subdued due to strong U.S. supply and high storage levels.

• Geopolitics driving markets: The conflict has introduced a sustained risk premium in oil prices and highlighted vulnerabilities in global energy supply chains, particularly key shipping routes.

• Global equities strong: U.S. and European markets posted solid gains over the week, led by technology and cyclical sectors, while Asian markets delivered mixed performance.

• Trinidad market firm but lower liquidity: Local indices advanced modestly, driven by strong gains in select stocks such as NGL and NEL, though overall trading volumes and market participation declined.

• T&T bonds remain attractive: Trinidad and Tobago sovereign bonds continue to offer a balanced investment profile, trading tighter than Caribbean peers but providing a yield premium over higher-rated Latin American credits.

Global investors have been keeping on their radar Crude Oil and Natural Gas prices in recent weeks. Year-to-date data from the U.S. Energy Information Administration (EIA) shows a clear divergence between crude oil and natural gas prices, with the Israel–Iran war acting as a major catalyst for price movements.

Crude oil prices have been highly volatile but decisively upward trending. The escalation of the Israel–Iran conflict in early 2026 triggered significant supply disruptions, particularly through the Strait of Hormuz, a critical artery for global oil trade. This led to an immediate spike in prices, with Brent crude temporarily approaching US$90 to $115 per barrel range. Even after partial normalization of shipping routes, a persistent geopolitical risk premium has remained embedded in prices. In additional, OPEC+ production discipline and resilient demand from Asia have reinforced the upward momentum, keeping inventories tight and supporting elevated pricing throughout the year.

Natural gas markets, while also affected, have behaved differently. Prices experienced short-term spikes due to concerns over LNG supply disruptions, particularly from the Middle East. However, strong U.S. shale production, high storage levels, and relatively mild weather conditions have kept prices contained within the US$2.50 to $3.50 per MMBtu range for most of the year. The regional nature of gas markets and flexible LNG flows have helped cushion the global impact compared to oil.

The conflict has underscored the vulnerability of global energy infrastructure, particularly transport chokepoints. Insurance costs for tankers have risen, shipping routes have been rerouted, and precautionary stockpiling by major importers has further tightened near-term supply conditions.

Energy analysts expect Oil prices to average between US$80 to $100 per barrel in the near term, with upside risk toward US$110 if geopolitical tensions escalate or supply disruptions intensify. Natural gas is likely to trend higher in the second half of the year, potentially reaching US$3.50 to $4.50 per MMBtu as LNG demand strengthens, particularly from Europe and Asia. Overall, energy markets will remain highly sensitive to geopolitical developments, with volatility expected to persist as the Israel–Iran situation evolves.

Global Equity Markets

Over the past five trading days, global equities delivered a generally constructive performance, led by the United States and continental Europe, while Asia was more mixed.

The S&P 500 Total Return Index rose 4.55% over the week, the Nasdaq Composite gained 6.84%, and the Dow Jones Industrial Average advanced 3.19%, reflecting renewed risk appetite and strong performance in large-cap technology and growth names. In the UK, the FTSE 100 rose a more modest 0.63%, suggesting that its heavier weighting in defensive and commodity-linked sectors produced steadier but less aggressive upside. In Europe, the STOXX 600 gained 1.91%, the Euro Stoxx 50 rose 2.22%, the CAC 40 added 2.00%, and the DAX advanced 3.77%, indicating that investors rotated back into cyclicals and exporters as sentiment improved.

Asian markets were less uniform. Japan’s Nikkei 225 gained 2.73% over the five-day period, although the broader tone in Asia was restrained, with the Hang Seng up 1.03%, the Shanghai Composite up 1.64%, and the ASX 200 slightly negative at -0.15%, pointing to a more selective risk environment. The mixed performance suggests that investors remain attentive to China’s growth outlook, currency trends, and the path of global interest rates. For the week ahead, investors should watch U.S. earnings, Treasury yield movements, and any shift in central bank guidance, as these will likely determine whether the rally broadens or pauses after a strong week.

In Trinidad and Tobago, the market was firmer, but trading activity remained subdued. The TTSE Composite Index rose 0.85% to 942.36 and the All T&T Index gained 1.39% to 1,361.69, while the Cross Listed Index fell 0.76%. Market volume declined 35.69% week over week and value traded fell 75.84%, indicating that gains were driven more by price moves in selected names than by broad participation. NGL was the standout performer, rising 29.27% to a 52-week high, while NEL gained 14.17% and One Caribbean Media rose 20.00%. In the fixed income market, the banking system excess liquidity declined to TT$4.05 billion from TT$5.11 billion the prior week, though local liquidity conditions remain ample overall.

Trinidad and Tobago’s USD sovereign bonds continue to trade as a more defensive credit within the Caribbean, with yields reflecting its stronger BBB- rating. Offer yields range from approximately 4.38% (2027) to 6.39% (2036), positioning the country tighter than lower rated peers such as Barbados and Jamaica. In comparison, Barbados and Jamaica bonds trade at higher yields, reflecting greater credit risk. Overall, Trinidad and Tobago offers investors a balanced profile, that is providing yield enhancement relative to higher-rated Latin American issuers while maintaining stronger credit quality than most regional peers.

About the author: Dave Dookie is the Managing Director of Waterloo Capital Advisors Limited, a Trinidad and Tobago based financial advisory firm specializing in investment management, capital markets and structured finance. He has advised governments, financial institutions, and energy companies on debt issuance, project financing, and strategic capital raising across the Caribbean. He holds degrees and advanced qualifications from the London School of Economics and Political Science (LSE) and the University of London and has completed advanced training in data science through the MIT Applied Data Science Program.

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