Guyana is one of the smallest countries in South America, but Monday’s election could have a major impact on the oil market and the US. This is what you need to know.
Surrounded by mineral resources, Guyana’s oil production is growing and could surpass Iran’s production by 2027. However, the threat of military conflict looms on Guyana as Venezuela claims one of the country’s oil-rich territory.
Meanwhile, Guyana’s strategic resource extraction has attracted attention from the US and China.
According to a report by Global Energy Monitor, it is the third smallest country in South America, but by 2035 Guyana has the highest expected growth in oil production worldwide by 2035. By then, the country has already produced around 2 million barrels each day. This is the same amount produced in 2022 by Colombia, Ecuador, Peru, Trinidad, Tobago and Venezuela.
In the future, the ability to produce sustainably will continue to place Guyana at the heart of the competition between the US and China, analysts told CNN.
On Monday, Guyana elected the next president and his members of the parliament and regional council. Current President Irfaan Ali is the leader of the People’s Progressive Party/Civic and is seeking re-election.
Another main candidate is longtime MP Aubrey Norton, the leader of the opposition, and the National Congress Reform Party, son of businessman Azuldin Mohamed, representing a new party called We Invest In the Nation (Win). Mohamed was approved by the US in 2024, according to a statement from the US Treasury Department. He claimed that he “sought to exploit Guyana’s undeveloped gold sector for personal gain.”
The country’s economic change began in 2015 when US oil company Exxonmobil discovered around 11 billion barrels in the deep sea. Since then, the country has stuck to oil as a magic bullet for prosperity. This is a policy pursued by former President David Granger, who ruled until 2020. That strategy is maintained by current President Ali.
Guyana is a country with a high poverty rate. However, since 2019 when oil production began, GDP has increased by 63.3% in 2022 and 33.8% in 2023, according to World Bank data. In 2024, Guyana’s economy grew in double digits for the fifth consecutive year, expanding 43.6%. This was due to oil production and exports, according to the country’s finance minister Ashni Singh last January.
The country produces approximately 650,000 barrels of oil every day. This makes Guyana’s energy sector a central pillar of its own economy, highlighting the IMF having the highest GDP growth rate in the world between 2022 and 2024.
“Guyana’s current growth rate is truly impressive,” Ryan Berg, director of the Americas program at the Center for Strategic and International Studies (CSIS), told CNN. He said there is a need to “manage new wealth” in a way that achieves growth “in an inclusive and stable way.”
Imdat Oner, a political analyst at Florida International University, a former Turkish diplomat in Venezuela, told CNN that a major conflict-free election would “prove that sudden oil wealth doesn’t have to erode democracy, as did Venezuela.”
“If the next government manages this boom with transparency and stronger institutions, it could be an example of the whole region. That’s why these elections are important,” Oner said.
According to Benjamin Gedan, a researcher at Johns Hopkins University and director of South America on the National Security Council, this exponential growth driven by the energy sector at key moments when key producers like Russia and Iran are subject to sanctions, transcending its own borders and attracting global attention at key moments.
The final election process plunged the country into a long, volatile political conflict, according to Gedan, who is also director of the Wilson Center’s Latin American program. He traveled to Guyana in March, where he met President Ali and other officials.
With these elections, Gedan does not rule out the possibility of new social tensions that could deepen polarization along the borders of ethnic groups that believe it will “suspend the development of the nation and make it more vulnerable to potential interference” from Venezuela.
Historic land conflict with Venezuela
The election is taking place amid growing tensions with Venezuela over its country’s claims over the region of Essequibo, where the main economic activity is oil extraction and gold reserves. The area is home to an estimated 125,000 people, and has several indigenous groups, rich in nature, forests and agricultural resources.
As a former British colony that became independent in 1966, Guyana inherited the territorial dispute after the 1899 Paris Arbitration Award granted the UK sovereignty of the region.
Essequibo has since been a matter of controversy between Guyana and Venezuela, but tensions have peaked in recent years with Caracas’ claims.
In 2024, the Venezuelan National Assembly approved a law creating the state of Guayana Esequiva, and just a few weeks ago, the Venezuelan government went to the International Court of Justice (ICJ), where it presented “additional evidence” on sovereignty claiming about about a third of Guyana.
Nevertheless, Venezuela has made it clear that it does not recognize the jurisdiction of the UN Supreme Court and does not comply with the “decision issued on this issue” to resolve territorial disputes. The incident is pending.
The Guyana government calls Venezuela’s claims the country’s “existential threat.”
Guyana and the US – An alliance to Venezuela?
Gedan told CNN that Guyana lacked resources to protect itself from potential invasions of its territory, leading the government to approach Venezuela, particularly countries that are opposed to the United States.
“Last year, Royal Navy warships visited the area to support Guyana, and the US military organized a joint military exercise with Guyana,” analysts said. He added that in August, Trinidad and Tobago expressed support for Washington’s potential military intervention to protect the country.
Berg of think tank CSIS said the US needs a strong partner in Guyana for many reasons, both economic and security.
The US announced military deployments in the Caribbean waters near Venezuela, strengthening its rhetoric regarding drug trafficking against the Maduro government.
Guyana is surrendering to solid support for the American initiatives highlighted by Secretary of State Marco Rubio.
A strong alliance with the US “was won and ensured that the Maduro administration could not attempt an adventurous policy with Guyana,” Berg said.
Oner believes tensions between Venezuela and Guyana will likely escalate into armed conflict.
It was caught between China and the US
Guyana is also captured in the midst of economic competition between the US and China. While American companies are leading oil production domestically, China is investing in infrastructure.
“Guyana’s ability to produce oil over the years in a cleaner and more profitable way than current producers will be at the heart of the competition between the US and China,” Berg said. He does not predict that Guyana will only lean towards dealing with one superpower, but rather maintains the bond, “We will decide to match both countries depending on the project.”
Gedan of the Wilson Center said Guyana’s current president “seems to clearly like the United States.” He also met with senior US government officials.
However, Gedan pointed out that even beyond the oil sector, it could be accepted for investment from China. For example, the new Demerara River Bridge in the capital of Guyana is being built by Beijing.
However, Gedan emphasized that Exxon and Bechtel are one of the most influential companies in the country, both of which are US-based companies.
Oner, a political analyst at Florida International University, said China’s interest is not only about oil, but also about its impact in areas traditionally considered “the US backyard.”
Guyana’s challenge is to maintain balance. If Guyana succeeds, it says that it can turn connections with both superpowers into actual economic and political rewards.
