Maldives Faces Oil Price Shock as War in Middle East Continues
The Maldives is navigating an unprecedented crisis as oil prices surge due to the ongoing war in the Middle East. Brent crude skyrocketed from $67 a barrel on February 28 to $119 on Monday, and even a ceasefire would not bring immediate relief to the island nation.
The Maldives relies entirely on imports for electricity and transport, with foreign reserves covering only one month of imports. The country must repay a $500 million Islamic bond in less than a month, adding to its financial strain.
Ahmed Mohamed, a former economic minister, estimated that the price spike could add $1 million a day to the import bill compared to pre-crisis prices. He warned that even with a ceasefire, the annual expenditure of about $710 million could exceed $1 billion this year.