Latin America Oil Poised to Benefit from Middle East Disruptions

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Written by Amir Richani for IIR News Intelligence (Sugar Land, Texas)

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Summary

While the world focuses on energy disruptions in the Middle East, South and Central American countries may benefit from high oil prices and finally realize their investment opportunities.

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Conflict Means Opportunity

The United States/Israel conflict with Iran is disrupting Middle Eastern energy infrastructure, limiting production, impeding shipping routes, damaging facilities and causing global oil prices to surge.

On Tuesday, Brent crude oil, the global benchmark, was trading near $91 per barrel in pre-market trading after running well above the $100 mark the day before. For more on that, see Breaking Energy News (BEN).

The ongoing war is increasing the geopolitical value of oil producers located outside the Persian Gulf. For instance, the Strait of Hormuz handled around 20 million barrels per day (BBL/d) in 2025, according to the International Energy Agency (IEA), suggesting that disruptions would remove significant volumes from the market.

South and Central American countries, from Brazil to Argentina, are well-positioned to benefit from high prices and relative geopolitical stability compared to the Middle East.

With wide ranging export arteries from the Pacific and Atlantic coasts to midstream terminals along the Panama Canal, the region is already reducing dependance on single chokepoints.

As a result, the war reinforces the need to diversify oil sources for major hydrocarbon importers like China. Buyers more exposed to crude flowing through the Strait of Hormuz are likely to face greater disruptions, while those with diversified supplies may absorb any short-term shocks.

The crisis in the Middle East is therefore sharpening the focus on would-be investors in the region's upstream and exports infrastructure, favoring markets such as Brazil, Guyana and Argentina, which are expanding production and export terminals as buyers look for more resilient supply chains.

At the same time, the region's crude grades range from extra-heavy sour, such as Venezuelan grades, to light crude, such as those from Argentina, offering refiners the opportunity to diversify their slate.

In Terms of Production

Brazil, the largest hydrocarbon producer in the region, maintained output of 5.168 million barrels of oil equivalent (BOE/d) throughout January, 15.87% higher year over year, with oil accounting for 3.953 million BBL/d. The Tupi, Buzios and Mero fields led the high volumes, each producing more than 600,000 BBL/d.

Brazil crude output recently has moved more than 4 million BBL/d, driven by pre-salt fields and new offshore platforms.

China, the largest importer of Brazilian crude, could import higher volumes, as a significant share of Chinese imports currently comes from the Middle East. Throughout 2025, Brazilian oil represented 8% of Chinese imports, only behind Russia, Saudi Arabia, Malaysia and Iraq, according to data from China's General Administration of Customs.

Despite its significant production gains over the last few years, Brazil is expected to continue expanding its output. Industrial Info is tracking 574 oil and gas production projects in the country, worth US$42.28 billion in investment. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production Project Database can view a list of detailed project reports.

Meanwhile, Argentina hopes to further attract attention to its growing energy developments in Vaca Muerta, one of the world's largest shale reservoirs. The South American nation has seen an exponential increase in its shale production, which has come to dominate its oil output.

In January, Argentina produced 872,000 BBL/d, a 15.5% year-over-year increase. Shale production from Vaca Muerta represented 68% of January's output.

According to Argentina's National Institute of Statistics and Census (INDEC), oil and petrochemical exports totaled US$11.77 billion in 2025, with oil accounting for 81.1% of the total. The U.S., Chile and Brazil were the main destinations of these products.

Nevertheless, events in the Middle East, as well as Argentina's Incentive Regime for Large Investments (RIGI), which grants fiscal and legal benefits to companies investing in projects over US$200 million, could help increase international interest in Vaca Muerta, despite its high production costs.

Industrial Info is tracking 395 upstream projects in Argentina worth investments of US$18.08 billion.

Venezuela, for its part, is hoping to benefit from the high oil prices amid renewed interest from Washington to develop and export the nation's resources and attract foreign investments.

Historically, Venezuela's exports headed mainly to China, India and the U.S. However, the White House is doubling down on its efforts to divert more barrels to U.S. refiners. According to Reuters, Venezuela exported about 800,000 BBL/d in January, up from 498,000 BBL/d in December.

Other regional hydrocarbon producers such as Mexico, Colombia, Peru and Ecuador also may benefit from the current situation.

International interest from the likes of China and the U.S. is not new. However, the new crisis in the Middle East is exposing bottlenecks and operational disruptions, which could be exacerbated if the conflict continues.

Across the whole region, IIR is tracking 1,908 capital oil and gas projects in Latin America, totaling US$120.36 billion in investments.

Key Takeaways

• Hydrocarbon production in the Middle East has been disrupted.
• Brazil produced over 5 million BOE/d of oil and gas in January, while Argentina continues to see gains from shale production.
• South American countries will benefit from higher hydrocarbon prices.

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About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resources' Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).