Brent crude oil traded near $93 a barrel Friday as disruptions to oil tanker traffic through the Strait of Hormuz continued to drive prices higher, adding to concerns about global energy supplies amid escalating conflict in the Middle East.
The situation is being closely monitored in Latin America, with Argentina particularly attentive to the potential benefits of increased oil revenues. According to consulting firm Gas Energy Latin America, the price of a barrel rose from approximately $64 to nearly $76 following the recent escalation of hostilities, a jump of around $12.
Argentina’s energy sector is focused on the development of Vaca Muerta, a vast reserve of unconventional oil and gas in the Neuquén Basin. Álvaro Ríos Roca, former hydrocarbons minister of Bolivia and director of Gas Energy Latin America, explained that many Latin American economies rely heavily on exports of raw materials, including oil. “These countries earn money mainly from those resources because they do not produce or export much science or technology,” he said. “When the price of oil rises, countries that produce it earn more money and the state similarly receives more taxes. That money helps them maintain their public finances, which are often weak.”
Ríos Roca identified Brazil, Guyana, and Argentina as the primary beneficiaries of higher oil prices in the region, as all three are net oil exporters. Still, he highlighted Argentina’s particularly strong potential. “Argentina has the best prospects in oil and gas. Its exports will continue growing because the international market is demanding more energy,” he stated.
Several energy projects are underway in Argentina, including a mid-scale liquefied natural gas (LNG) initiative led by Pan American Energy, expected to begin exports in the second half of 2027. YPF is also planning a larger-scale LNG project with anticipated sales between 2030 and 2031, aiming to establish Argentina as a significant global exporter of natural gas.
Brazil, while a substantial oil exporter, lacks the same capacity to export natural gas, with much of its gas production reinjected into oil fields to maintain extraction pressure or used domestically. Argentina, in contrast, utilizes hydraulic fracturing, or fracking, to extract oil and gas from deep rock formations – a technique that spurred the energy boom in the United States.
Daniel Dreizzen, former secretary of energy planning of Argentina, concurred that rising prices would benefit all producing nations. “Export revenues could increase by about 20%, in line with the rise in oil,” he told UPI. He also noted that Argentina’s refining capacity is currently operating at its limit, meaning any additional oil produced would be destined for export.
“Argentina cannot refine much more. So the extra crude is exported,” Dreizzen said, adding that this scenario could improve profitability for oil companies and potentially encourage further investment in the energy sector if domestic prices align with international levels.
Mexico faces a different outlook, with Ríos Roca predicting continued declines in production due to a lack of investment. State-owned Petróleos Mexicanos (Pemex) is burdened by debt and has limited resources for new exploration projects. “Mexico had highly strong production for decades, but it has been in decline for years. Even Venezuela now has better prospects,” he said.
Several Latin American countries, including those in Central America, Bolivia, Paraguay, Uruguay, and Chile, as well as many Caribbean economies, are expected to face challenges from sustained high prices as net energy importers. These nations will likely experience increased fuel costs, contributing to inflation and potentially hindering economic growth.
Analysts agree that global demand for natural gas is expected to continue growing, with Ríos Roca stating, “There is no decarbonization of the planet without natural gas.” This trend is driving expansion in the LNG trade, creating opportunities for new exporters like Argentina and potentially Venezuela.
The immediate trajectory of energy markets remains heavily dependent on developments in the Middle East. Both analysts emphasized that the duration of the conflict and potential damage to oil and transport infrastructure are key factors. “Productive infrastructure is being destroyed amid the attacks,” Ríos Roca said. “If those facilities are seriously damaged, the effects on the market could last much longer than the conflict itself.”
