As the U.S.-Israel war against Iran escalates, Gov. Albert Bryan Jr. warned Wednesday that Virgin Islanders could see large spikes in fuel prices as a result, and his government is in no position to subsidize electricity costs as it has in years past.
Bryan expressed deep concern over the growing crisis in the Middle East and the potential consequences the conflict may have for American service members abroad and for the economic stability of the Virgin Islands in a statement emailed to the media Monday morning and posted online as well.
As reported by national and international news outlets, the conflict that began Saturday with coordinated strikes on Iran by the U.S. and Israel has choked off the world’s oil and gas shipments through the Strait of Hormuz off Iran’s southern coast, which normally carries one fifth of the world’s oil and a large amount of natural gas.
According to Lloyd’s List Intelligence, an authority on maritime data and analysis, “some 200 internationally trading crude oil tankers and product tankers are effectively stranded in the Gulf following a total halt of vessel movements” through the narrow waterway, “triggering a sharp disruption across global crude and product markets.”
While V.I. Water and Power Authority CEO Karl Knight told the Source in an interview Tuesday that WAPA does not intend to seek a rate increase at this time — the utility is less dependent on diesel than in the past, relies primarily on liquefied petroleum gas, and has an increasing share of solar generation, he said — the governor’s tone Wednesday was less optimistic.
“The Virgin Islands remains heavily dependent on imported fuel for electricity generation, and global instability often leads to volatility in oil markets,” Bryan said. “Events in the Middle East have historically resulted in sharp increases in global oil prices. For the Virgin Islands, that translates directly into higher fuel costs, which ultimately affect electricity rates for our residents and businesses.”
Bryan noted that while the territory has made progress in stabilizing its energy infrastructure, the government does not currently have the same financial capacity it once had to subsidize electricity costs at high levels, including utilizing about $100 million in federal American Rescue Plan Act funds in 2022 and 2023. In April 2024, the governor declared an energy state of emergency, which expired in January 2025 and included paying a $2.3 million debt WAPA owed Aggreko for leased generators, and $11 million the territory’s hospitals and the Waste Management Authority owed the utility.
That kind of money isn’t available now, Bryan warned Wednesday.
“We must be candid with our community,” he said. “The government is not in the same fiscal position it was in years past to absorb large spikes in fuel prices. A sustained increase in oil costs could place significant pressure on the Virgin Islands Water and Power Authority and, ultimately, on the rates paid by consumers,” which are already among the steepest in the world.
The governor said his administration is closely monitoring international developments and remains in communication with local energy officials to assess potential impacts and explore mitigation strategies.
“We are actively evaluating every available option to protect Virgin Islands families and businesses from the worst effects of global energy volatility,” Bryan said. “At the same time, this moment underscores why our continued investment in renewable energy and energy independence is not simply an environmental priority. It is an economic necessity.”
Bryan urged residents to remain informed as the situation evolves and said his administration “will continue to keep the public informed and work with our partners at every level to ensure that the Virgin Islands is prepared for the potential economic ripple effects of this conflict.”
Bryan also emphasized that the Government of the Virgin Islands stands in solidarity with the men and women of the United States Armed Forces who are stationed in the region and may face increased risks as tensions continue to rise.
“First and foremost, our thoughts are with the brave American soldiers serving overseas, many of whom come from communities like ours,” Bryan said. “We pray for their safety and for a swift de-escalation of hostilities in a region that has already endured too much conflict.”
