LATIN AMERICA · ANALYSIS
Published Tuesday, 27 October, 6:13 a.m. ET · Source: EIA, IEA, UKMTO, ANP, ANH, Guyana’s Ministry of Finance, TotalEnergies, Campetrol, Wood Mackenzie
Key Facts
- —Gulf crisis Attacks on ships have cut traffic through the Strait of Hormuz, the world’s key oil chokepoint, by roughly 70 percent, and Brent trades near $115 a barrel.
- —Guyana’s rise Guyana pumped about 902,000 barrels a day in the first half of 2026, and its December loading schedule could push exports past 1 million for the first time.
- —Venezuela’s return Chevron plans to invest more than $7 billion over five years in Venezuela, aiming to lift its output to about 600,000 barrels a day.
- —Argentina’s record Argentina’s crude output hit a record 973,700 barrels a day in September, and Wood Mackenzie expects it to pass Guyana by 2028 as South America’s third-largest liquids producer.
While the Gulf stays unstable, Latin America has a real chance to become the new Middle East of oil. It has giant reserves, ports on two oceans with no chokepoint, short routes to the United States and a wave of governments opening their doors to investors.
The proof is uneven. Guyana already makes more oil per resident than Kuwait, while Venezuela, Colombia and Ecuador are still mostly promises.
(A chokepoint is a narrow sea passage that can be blocked.)
Why the Gulf Is Losing Its Grip
The Strait of Hormuz normally carries about 20 percent of the world’s seaborne oil. The UKMTO maritime monitor counts about 254 ship transits a week, roughly 70 percent below pre-war levels, and 23 attacks on ships since 1 October.
October is the worst month for attacks on commercial ships since UKMTO began monitoring in 2017, and the Houthi militia keeps up drone and missile attacks on Saudi Arabia. Iran says the strait stays shut without US concessions.
Kuwait has no route around the strait. It pumped about 2.5 million barrels a day before the war; one anonymous source cited by a news agency puts September at about 1.77 million.
Guyana, the New Eldorado
Guyana is the most dramatic case. This small country on South America’s northern coast produced about 902,000 barrels a day in the first half of 2026, and Stabroek, the offshore block that supplies it, passed 1 billion barrels produced in September.
ExxonMobil operates Stabroek with a 45 percent stake. Chevron holds 30 percent, through its purchase of Hess, and China’s CNOOC holds 25 percent.
The Uaru production ship, which can produce 250,000 barrels a day, arrived in August, and its first cargo is scheduled for 11 to 12 December. By 2030, installed capacity on the block is expected to reach about 1.7 million barrels a day, though that measures capacity, not forecast output.
By our own arithmetic, Guyana pumps about 1.07 barrels a day for each resident. Kuwait managed about 0.51 before the war and about 0.36 in September, so Guyana’s output per person is about twice Kuwait’s pre-war level and three times its September level.
Guyana’s income per person is about $33,000, almost the same as Kuwait’s, by IMF-based estimates, and the IMF projects growth of 16.2 percent for 2026 after 19.3 percent in 2025. The state’s Natural Resource Fund is paying about 32 percent of the 2026 budget.
But Guyana’s output is only about 36 percent of Kuwait’s pre-war output. Kuwait holds roughly 100 billion barrels of reserves against about 11 billion barrels of oil equivalent for Stabroek (a 2022 estimate), and Kuwait’s investment authority is estimated at $0.85 to $1.07 trillion against Guyana’s $4.1 billion fund.
Guyana is the Kuwait of per-person wealth, not yet of scale.
Suriname Is Next Door and Next in Line
Suriname, Guyana’s eastern neighbor, is following the same path. The GranMorgu project in Block 58 is operated by TotalEnergies with 40 percent; APA Corporation also holds 40 percent and the state company Staatsolie 20 percent.
The final investment decision came in October 2024, committing about $10.5 billion, and the floating production ship will handle 220,000 barrels a day. TotalEnergies’ chief executive said in July the project is 40 percent complete, with first oil expected in the first half of 2028.
In January the IMF said that fiscal slippages in 2025 had eroded earlier progress toward stability.
Venezuela Comes Back
Venezuela claims the world’s largest reserves, 303 billion barrels, though experts doubt that figure. US forces captured Maduro on 3 January 2026, and Delcy Rodríguez is now acting president; Washington recognised her on 5 March.
A hydrocarbons law reform passed on 29 January, and no election date has been set. US licenses allow established American companies to trade and invest, but they can be revoked at any time.
On Venezuela’s own figures, output rose from 924,000 barrels a day in January to 1.206 million in September, but it has been flat since July. Secondary sources put September at 1.15 million, and exports were 1.08 million, of which 629,000 went to the United States.
Chevron plans to invest more than $7 billion over five years, aiming to lift its output to about 600,000 barrels a day. Italy’s Eni signed a 25-year contract for the Junín 5 field, which holds about 35 billion barrels in place but produces only about 12,000 barrels a day today; GeoPark has committed about $1.2 billion.
State oil company PDVSA says 61 of 105 planned contracts are signed, with a 31 December deadline. Blackouts in July hit the plants that upgrade the thick crude, imports of the light fuel used to thin it more than doubled in August, and drilling rigs are scarce.
According to trading sources, buyers bid $18 to $20 under Brent for heavy Merey crude in September, as traders pushed discounts over freight costs and delays. Freight from Venezuela to the US Gulf Coast cost about $5 a barrel, up from $1.90 early in the year.
Colombia Opens the Door
Colombia’s new president, Abelardo de la Espriella, won the 21 June runoff with 49.65 percent of the vote against 48.70 percent, on the preliminary count. He took office on 7 August; his predecessor, Gustavo Petro, had halted new exploration contracts, and de la Espriella has pledged to reverse that.
On 7 August he pledged to revive oil and gas, expand exploration and allow fracking under strict technical and environmental standards. On 25 September, at the swearing-in of the new Ecopetrol president, Joaquín Gutiérrez, he said his government reopens the path of exploration fully.
No licensing round or fracking timetable has been announced. Output was about 733,000 barrels a day in August, down 2.3 percent from a year earlier, according to the industry group Campetrol.
Proved reserves stand at 2.02 billion barrels, about 7.4 years of supply at current rates, according to the National Hydrocarbons Agency (ANH). Imported gas now supplies about 41 percent of Colombia’s demand and costs about $25 per MMBtu, the standard gas price unit, against $10 to $12 for the domestic gas it replaces.
Risks remain. Attacks on the Caño Limón-Coveñas pipeline in October, suspected to be the work of the ELN guerrilla group, show the security challenge, and the president’s narrow mandate and community opposition to fracking limit his room to move.
Ecuador Wants to Turn Output Around
Ecuador, under President Daniel Noboa, produced about 460,000 barrels a day in the first eight months of 2026, and state company Petroecuador accounted for 365,704 in August. The ministry targets 500,000 barrels a day by December, but the central bank projects only about 463,000 for 2027.
A new hydrocarbons law is in final drafting, and a round of 14 fields, worth about $1 billion, is planned from December. A second round of 14 blocks on the Peru border, with potential of 300,000 barrels a day, is slated for late 2027.
Peru’s state company Petroperú awarded a 16.2 million barrel supply deal for Oriente, Ecuador’s main export crude, worth about $1.65 billion. It cuts freight per cargo from about $7 to $8 million to about $1.8 million.
A major risk is erosion of the Coca River, which shut the main pipelines in 2025; a bypass would take 18 to 24 months to build.
Argentina and Brazil Already Deliver
Argentina’s crude output hit a record 973,700 barrels a day in September, up 15.5 percent and 26,300 short of 1 million. Almost all of it comes from the Vaca Muerta shale in Neuquén province, which supplied 697,595 of the 714,089 barrels a day produced there in September.
Wood Mackenzie expects Argentina to pass Guyana by 2028 as South America’s third-largest liquids producer. The Vaca Muerta Sur export pipeline was about 80 percent complete in July, with first exports expected in early 2027.
Brazil remains the region’s giant. Its ANP oil agency reported August oil production of 4.615 million barrels a day, up 18.4 percent from a year earlier.
Oil and gas together reached 6.002 million barrels of oil equivalent a day (oil and gas counted in oil-barrel terms), the first time above 6 million. Petrobras produced 2.96 million barrels a day in September, and China bought 54 percent of Brazil’s crude exports in the first half of 2026.
The US Energy Information Administration’s October outlook, as reproduced by a secondary source, expects Brazil to produce 5.26 million barrels a day of liquids this year, Argentina 1.08 million and Guyana 0.92 million. The United States tops them all at 24.39 million.
The Honest Limits
The boom is real, but it is not a simple replacement for the Middle East. Shipping one barrel from the Americas to Asia now costs roughly $40, and the IEA put the Gulf-to-Asia rate at about $36 in early October.
That freight bill pushes down what Asian buyers will pay for heavy Latin American crude. Argus, a price-reporting agency, put Colombia’s Vasconia at about $84 and Ecuador’s Oriente at about $76 before freight on 8 October, each down more than $10 to a six-week low.
Venezuelan barrels compete directly with Colombian and Ecuadorian heavy grades. If the Strait of Hormuz reopens, part of the risk premium behind today’s prices could fall away.
Reserves are not barrels: contracts and pledges do not equal output. Venezuela’s claimed 303 billion barrels, Guyana’s roughly 11 billion barrels of oil equivalent and Argentina’s shale all need years of investment and stable politics.
What It Means for US Readers
For US buyers, the shipping route from Venezuela to the US Gulf Coast is short, at about $5 a barrel in freight. The United States took 629,000 barrels a day of Venezuela’s 1.08 million barrels of exports in September.
Chevron holds 30 percent of Guyana’s Stabroek Block and plans to invest more than $7 billion in Venezuela. Gas buyers should note that Colombia still imports about 41 percent of its own gas.
What to Watch
The US Federal Reserve decides on rates on 28 October, and US midterm elections follow on 3 November. Guyana expects Uaru’s first cargo on 11 to 12 December.
Guyana’s government expects the International Court of Justice to rule on Venezuela’s Essequibo claim from November 2026, and Venezuela rejects the court’s jurisdiction. PDVSA’s contract deadline falls on 31 December, and Argentina’s Vaca Muerta Sur pipeline is due to ship its first exports in early 2027.
What We Do Not Know
Ship transits counted by UKMTO are about 70 percent below pre-war, but barrel flows are harder to measure and trackers disagree. Kpler estimates about 14 million barrels a day including offshore transfers, about 82 percent of pre-war flows; another estimate puts the figure at 6 to 8 million, and Tankertrackers at 3.7 million.
Official Venezuelan figures show about 1.206 million barrels a day in September, while secondary sources show 1.15 million. Output has been flat since July, so the 1.4 million target for year-end looks hard to reach.
Frequently Asked Questions
Why is Latin America being compared to the Middle East for oil?
Guyana, Venezuela, Argentina and Brazil are all raising output, and their ports on the Atlantic and Pacific avoid chokepoints like Hormuz. Colombia’s new government and Ecuador’s planned bidding rounds are opening exploration.
How much oil does Guyana produce?
About 902,000 barrels a day in the first half of 2026. Its December loading schedule could push exports past 1 million barrels a day for the first time.
Is Venezuela really coming back as an oil producer?
Output is about 1.2 million barrels a day on Venezuela’s own figures, up from 924,000 in January. It has been flat since July, and the 1.4 million barrel target for year-end looks hard to reach.
What are the main risks to Latin America’s oil boom?
Freight costs hit heavy crude bound for Asia, and a reopened Hormuz could cut the risk premium. Reserves and pledges also do not become barrels without years of investment.
Which companies are involved?
ExxonMobil operates Guyana’s Stabroek block with Chevron and CNOOC as partners. TotalEnergies leads Suriname’s GranMorgu project, and Chevron plans to invest over $7 billion in Venezuela.
Sources: EIA, IEA, UKMTO, ANP, ANH, Guyana’s Ministry of Finance, TotalEnergies, Campetrol, Wood Mackenzie.
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This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief