Latin American Pulse for February 11, 2026

Risk Snapshot

Cuba / Mexico — Jet Fuel Runs Dry as Mexico Confirms Oil Halt; Humanitarian Aid Ships Dispatched

What Happened

• —Jet Fuel Shutdown: Cuba notified airlines late Sunday that jet fuel would be unavailable across all nine international airports from Tuesday February 10 through March 11—forcing carriers to refuel elsewhere and disrupting peak tourist season. Air Canada, WestJet, and Air Transat suspended all Cuba flights; Air Europa confirmed rerouting via Santo Domingo for refueling.
• —Mexico Confirms Oil Halt: President Sheinbaum on Monday acknowledged what Bloomberg had reported: Mexico has definitively halted all oil shipments to Cuba under Trump’s tariff threat. This marks Cuba’s first month without oil imports in a decade, per Bloomberg data.
• —Humanitarian Aid Dispatched: Mexico sent two Navy ships carrying 800 tons of food aid from Veracruz on Sunday, explicitly separating food from fuel. Sheinbaum called the U.S. sanctions “very unfair” and pledged to “take all necessary diplomatic actions to restore oil shipments.”
• —Emergency Measures in Havana: Cuba imposed a four-day workweek for state employees, reduced inter-provincial transport, shortened school days, and closed major tourism facilities. Deputy PM Perez-Oliva said fuel would be reserved for “essential services and indispensable economic activities.”
• —Russia Weighs In: Kremlin spokesman Dmitry Peskov described Cuba’s situation as “really critical” and said Moscow was “discussing possible solutions with our Cuban friends.” No concrete shipment commitments have been announced.
• —Diaz-Canel Defiant: Cuban President Miguel Diaz-Canel said Cuba was willing to hold talks with the U.S. but “not under pressure,” framing the blockade as an attempt to “strangle” the island’s 11 million people.

Why It Matters

The jet fuel suspension crosses a new threshold: it transforms Cuba’s energy crisis from a domestic emergency into an international logistics disruption, directly affecting foreign airlines, tourism operators, and the diplomatic infrastructure that connects Cuba to the outside world. Canadian airline Flair has already suspended Cuba flights entirely.

Mexico’s position has crystallized into a two-track strategy: comply with Washington on oil (avoiding USMCA-threatening tariffs) while maintaining the solidarity posture through humanitarian shipments. The question is whether this distinction holds politically—both in Mexico City, where Morena’s base demands more, and in Washington, where Florida Republicans are pushing to make any aid to Cuba a red line.

For the broader region, Cuba has become the test case for how far the Trump administration will push maximum pressure against a small island nation with no strategic threat capability—and whether the humanitarian costs create a backlash among Latin American governments that otherwise want good relations with Washington.

Risk Level: Critical

Brazil — Ibovespa Surges to Record 186,241; Central Bank Signals March Rate Cuts

What Happened

• —Record Close: The Ibovespa surged 1.8% to close at 186,241 on Monday, extending its rally to fresh all-time highs. The index is now up approximately 14% over the past month and 48% year-over-year. Heavyweight banks led the advance: Santander Brasil +6%, Banco do Brasil +2%, Bradesco +1.4%.
• —Rate Cut Signal: BCB minutes from the latest Selic decision indicated easing is likely to begin in March but emphasized a “strictly data-dependent” pace. With the Selic at 15%, the predictable transition trimmed the policy risk premium without triggering a dovish repricing—keeping real yields attractive for carry trades.
• —Earnings Season Continues: BTG Pactual fell 2.4% after reporting Q4 adjusted net profit of R$4.6 billion, up 40.3% year-over-year but in line with forecasts. BB Seguridade, Motiva, and São Martinho reported Monday; Suzano, Banco do Brasil, and TOTVS are due later this week.
• —Real Strengthening: The Brazilian real firmed toward R$5.22 per dollar, its strongest level since late 2024, supported by high carry, clearer monetary guidance, and favorable terms of trade. Elevated iron ore shipments and projections for a large trade surplus continue to underpin foreign currency inflows.
• —Petrobras Fine: Ibama fined Petrobras R$2.5 million for a fluid leak in early January at its controversial equatorial margin exploration project near the mouth of the Amazon—a politically sensitive development as environmental licensing debates continue.
• —Growth Forecast Trimmed: The Finance Ministry slightly lowered its 2026 GDP growth forecast while raising its inflation projection, keeping the policy backdrop mixed even as markets rally on rate-cut expectations.

Why It Matters

Brazil’s equity rally is becoming self-reinforcing: record highs attract flows, which compress risk premiums, which attract more flows. The combination of the world’s highest major-economy real interest rate (Selic at 15% with inflation around 4-5%) and a credible easing path creates an irresistible carry-and-duration trade for foreign allocators. The real’s appreciation toward R$5.22 reflects this dynamic.

The risk is that fiscal uncertainty and political noise—persistent features of the Lula administration—cap upside by sustaining a latent risk premium. The Finance Ministry’s simultaneous growth downgrade and inflation upgrade captures this tension: the macro story is good enough for markets but not good enough for complacency.

Risk Level: Constructive

Panama — CK Hutchison Launches Arbitration as China’s Retaliation Meets Economic Reality

What Happened

• —International Arbitration Filed: CK Hutchison announced the start of international arbitration proceedings against Panama over the Supreme Court ruling that voided its concession to operate the Balboa and Cristóbal port terminals. The company said it will seek “extensive damages.”
• —Maersk Takes Over: Danish logistics firm Maersk’s local subsidiary has assumed temporary management of both port terminals, ensuring minimal operational disruption during the concession transition period.
• —China’s Calibrated Response: Beijing’s retaliatory toolkit—state enterprise investment freeze, customs harassment of Panamanian agricultural exports, and cargo rerouting threats—remains in place but analysts assess the measures as largely symbolic. Jack Lee of China Macro Group called the response “carefully calibrated… aimed at signaling disapproval rather than forcing a policy reversal.”
• —Mulino Holds Firm: President Mulino reiterated that Panama is “a dignified country” that “will not allow itself to be threatened by any country on earth,” maintaining that the judiciary acted independently.
• —U.S. Applause: A State Department spokesperson praised Panama’s actions to “curb CCP influence in the canal and the region,” explicitly welcoming the court ruling and Panama’s earlier exit from the Belt and Road Initiative.

Why It Matters

The Panama Canal dispute has settled into a legal and economic war of attrition. CK Hutchison’s arbitration could take years to resolve and the damages sought could be substantial, creating a long-term fiscal contingency for Panama. Meanwhile, China’s retaliatory measures test a fundamental question: can Beijing impose meaningful economic costs on a country protected by U.S. strategic interest in the canal?

For the rest of Latin America, Panama is the precedent case. Governments watching from the sidelines are calibrating their own China positions based on whether Beijing’s retaliation produces real economic pain or proves to be largely performative. The answer will shape investment and diplomatic decisions across the hemisphere for years.

Risk Level: Critical

Argentina — January CPI Accelerates for Fifth Straight Month; INDEC Credibility Under Scrutiny

What Happened

• —Fifth Monthly Acceleration: INDEC reported that January inflation sped up for the fifth consecutive month, with the annual rate reaching 32.4%—up from 31.5% in December. The result complicates the Milei government’s 2026 budget target of 10.1% annual inflation.
• —INDEC Shakeup Fallout: This was the first release under new INDEC head Pedro Lines, following the resignation of Marco Lavagna over the government’s decision to shelve the long-planned CPI rebasing. Economy Minister Caputo’s claim that the methodology change “makes virtually no difference” contradicts analyst estimates of a roughly 50-basis-point gap.
• —Market Resilience: Despite the inflation uptick and INDEC controversy, the MERVAL continues its strong run, with country risk spreads at multi-year lows. Private forecasts collected by the central bank point to roughly 20.1% inflation in 2026—about double the official target but still a dramatic improvement from the 211% Milei inherited.
• —Legislative Push: Milei’s priority legislation in extraordinary sessions includes labor reform, lowering the criminal responsibility age, and ratifying the EU-Mercosur agreement. His strengthened congressional position following the midterm victory provides genuine legislative leverage for the first time.

Why It Matters

The disconnect between Argentina’s market performance and its inflation trajectory reveals the Milei trade in its purest form: investors are betting on the direction, not the level. As long as disinflation is the trend—even if it’s stalling at around 2.5% monthly rather than accelerating toward the government’s 1% target—the carry trade and reform optionality support Argentine assets.

But each episode of institutional interference—the INDEC shakeup, the shelved methodology—accumulates as a credibility deficit that becomes costly if the disinflation trend reverses. The CPI rebasing was part of Argentina’s IMF program commitments, and the delay signals that political convenience can override institutional independence when the two conflict.

Risk Level: Watchful

Venezuela — High-Profile Prisoners Released; February 13 Deadline for Full Amnesty

What Happened

• —Opposition Figures Freed: Juan Pablo Guanipa and Freddy Superlano—key allies of opposition leader María Corina Machado—were released from detention on Sunday, along with at least 30 other political prisoners confirmed by Foro Penal. Lawyer Perkins Rocha was also freed under “very strict precautionary measures.”
• —Guanipa “Kidnapping” Allegation: Machado alleged that Guanipa was subsequently taken by armed men shortly after his release—an accusation that, if confirmed, would represent intelligence services operating outside the amnesty framework and undermine the credibility of the entire release process.
• —February 13 Deadline: National Assembly President Jorge Rodríguez told prisoners’ families that all remaining detainees would be freed by Friday February 13 at the latest. Foro Penal has confirmed 383 releases since January 8, but estimates nearly 680 remain jailed for political activities.
• —Amnesty Bill Advancing: The National Assembly unanimously approved the Amnesty Law for Democratic Coexistence in a first vote on February 5. The second and final vote is scheduled for Tuesday. The bill would absolve those charged with treason, terrorism, rebellion, and related offenses in the context of political protest—and would lift candidacy bans on opposition figures including Machado.
• —Oil Reform Continues: The Rodríguez government continues advancing foreign investment opening in the oil sector, with Reuters reporting that the U.S. is paying a monthly Venezuelan “budget” from oil proceeds via a Qatar-managed fund—creating a financial architecture for the post-Maduro transition.

Why It Matters

The February 13 deadline is the most consequential commitment the Rodríguez government has made since the Maduro capture. Meeting it would represent the clearest signal yet that the interim government is serious about political normalization—though the Guanipa episode and continued gag orders on released prisoners suggest the security apparatus has not fully accepted the new terms.

The amnesty bill’s lifting of candidacy bans could transform Venezuelan politics by allowing Machado and other opposition leaders to participate in future elections. Whether the Rodríguez government ultimately intends competitive elections or simply a managed transition under Chavista control remains the central question for the country’s political future.

Risk Level: Active

Chile — Kast Inauguration One Month Away; Bachelet UN Campaign Gains Momentum

What Happened

• —Cabinet Announced: Kast announced his full cabinet on January 20, with picks drawn largely from the private sector and think tanks rather than professional politicians—consistent with his “emergency government” framing focused on security, economic stagnation, and migration.
• —European Tour: Kast spent early February in Europe, attending the VII Transatlantic Summit on freedom of expression at the European Parliament in Brussels and meeting with conservative parties—positioning himself internationally before taking office on March 11.
• —Bachelet Candidacy Formalized: The UN General Assembly received Bachelet’s candidacy documentation, making her the second formal candidate after Argentina’s Rafael Grossi. She faces competition from Rebeca Grynspan (Costa Rica), Ivonne Baki (Ecuador), and potentially Barbados PM Mia Mottley.
• —Kast Still Silent: The president-elect continues to avoid commenting on the Bachelet candidacy, stating his priority is domestic emergencies and he will address other matters “once he assumes office”—leaving the candidacy’s sustainability an open question through March 11.
• —Markets Rally: Chilean equities continue to outperform globally, with the transition viewed as orderly and reform expectations under Kast driving investor confidence. The evenly divided Senate means governance will require coalition-building with centrist parties.

Why It Matters

The March 11 inauguration is the single most consequential date on Chile’s near-term calendar. It will determine both the Bachelet candidacy’s viability (Kast’s support is essential for a sustained Chilean campaign) and the policy direction for Latin America‘s most closely watched incoming government. Kast’s technocratic cabinet picks and pragmatic tone suggest he has moved from his more ideological earlier campaigns toward governability.

The Bachelet question also has a Washington dimension: her criticism of Trump’s immigration policies during her tenure as UN High Commissioner for Human Rights is well-documented, and U.S. support (or non-opposition) in the Security Council is essential. Kast’s strong alignment with Washington creates a potential paradox—supporting a candidacy that the White House may quietly oppose.

Risk Level: Constructive

Colombia — March 8 Legislative Elections Approach; Campaign Season Heats Up

What Happened

• —Election Calendar Crystallizing: Colombia’s March 8 legislative elections and presidential primaries are now less than a month away, with the presidential first round on May 31 and a potential runoff on June 21. A record-breaking 107 pre-candidates have registered.
• —Three-Way Race Emerging: Polling shows leftist Iván Cepeda (31.9%) leading, followed by right-wing Abelardo de la Espriella (18.2%) and centrist Sergio Fajardo (8.5%). Petro’s Pacto Histórico coalition maintains the highest party support at 21%.
• —Uribe Returns: Former president Álvaro Uribe placed himself on the Centro Democrático’s Senate list at position 25—a calculated move requiring the party to win at least 25 seats for him to re-enter Congress. The math is ambitious but the political signal is unmistakable.
• —U.S. Factor: A large majority of Colombians—78%—say maintaining strong U.S. relations is essential for the next president. The Trump-Petro February 3 meeting generated warm atmospherics but no concrete agreements. Some reports suggest the U.S. is considering sanctions relief for Petro.
• —Petro’s Legacy Play: The president is pushing a constituent-assembly drive and campaign-season messaging that frames the election as a choice between “mafioso elites” and the people—an effort to maintain relevance even though he cannot seek reelection.

Why It Matters

Colombia’s 2026 election cycle is shaping up as the region’s most consequential after Brazil’s October presidential vote. The March 8 legislative results will serve as a bellwether—determining congressional composition, testing presidential candidates’ organizational capacity, and revealing whether the right’s fragmentation or the left’s base solidarity is the dominant dynamic.

The U.S. variable adds an external dimension that previous Colombian elections lacked. With 78% of voters prioritizing U.S. relations, candidates are calibrating their rhetoric accordingly—and Washington’s own behavior (sanctions, tariff threats, decertification) has become a domestic political issue in ways that favor the center-right.

Risk Level: Watchful

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