Tancoo defends projected US$73 oil price

Prime Minister Kamla Persad-Bissessar, second from left, delivers the budget on October 13 as Prime Minister Kamla Persad-Bissessar arrives in Parliament at the Red House, Abercomby Street, Port of Spain. - Photo by Faith Ayoung

Minister of Finance Davendranath Tancoo has defended the government's decision to base its fiscal 2026 budget on an oil price of US$73.25 per barrel and natural gas at $4.25 per million British thermal units (MMBtu).

His defence came during a post-budget forum hosted by the TT Chamber of Industry and Commerce at La Réve conference centre in San Fernando on October 14, where the business development manager at Heritage Petroleum Ltd, Nalini Ramkissoon, asked about the rationale for the price selection.

Tancoo said the price was selected using projections from the Ministry of Energy and Energy Industries, the calculation of which used a "basket of prices" and was developed under the previous administration. He said that within the projections are optimistic figures, pessimistic figures and one that lies between these estimates. The middle figure, he said, was used.

"I believe it is a realistic projection of where the oil prices are," he said.

He admitted the formula would yield different results from other metrics, such as the Brent crude oil price.

However, speaking to reporters after the event, the Minister of Finance said contingencies were built into the budget.

"We work with a multiplicity of scenarios, not just in terms of selecting the price of oil and gas that we'll be using but in terms of what effects it will have whether we get or we don't get, whether price is high or whether it is low...there are various scenarios that have been played out, including the possibility that the price of oil drops significantly lower."

The US Energy Information Administration (US EIA) said on October 7 that it forecasts the price of oil (Brent crude) to decline over the next few months, reaching as low as US$52 per barrel in early 2026.

"We forecast that oil prices will fall to an average of $62/b in the fourth quarter of 2025 (4Q25) and $52/b in the first half of 2026 (1H26). We expect inventory builds will average 2.6 million barrels per day (b/d) in 4Q25 and will remain elevated through 2026, putting significant downward pressure on oil prices."

As of midday October 14, the price was at US$62.20 per barrel.

On October 7, the US EIA also forecast the Henry Hub price of natural gas to reach US$4.10/MMBtu by January 2026, but average US$3.90/MMBtu for the year. As of midday, October 14, natural gas was at US$3.53.

Tancoo presented his maiden budget in Parliament on October 13, which saw expenditures at $59.2 billion and revenues at $55.4 billion; a $3.9 billion deficit.

Oil revenue is expected to be $11.254 billion, while non-oil revenue is forecast to be $43.402 billion. Capital revenue is expected to be $ 0.711 billion.