In this new edition, we analyze two stories: the impact of the conflict in Iran across Latin America's energy exporters and importers — and Brazil's Pix, which just surpassed cards and cash combined to become the country's primary payment infrastructure.
Beyond these analyses, the Market Intelligence and Political & Macro Watch sections cover a packed news cycle: the formal launch of the USMCA review, Colombia's divided congress ahead of the May presidential race, Chile's record export year, and the latest from Guatemala, Peru and Venezuela.
❐ STRATEGIC OUTLOOK
The Iran Shock: Latin America's Unlikely Winners and Real Risks
The US-Israeli military campaign against Iran, launched on 28 February 2026, has triggered what the IEA has called the largest supply disruption in the history of the global oil market. In the first ten trading days following the attacks, Brent crude surged 42%, briefly topping $119 per barrel, its first move above $100 since Russia's invasion of Ukraine in 2022. The Strait of Hormuz, through which roughly one-fifth of the world's oil flows, remains effectively closed.
For Latin America, the shock is real but its impact is deeply asymmetric. A Goldman Sachs report identifies Latin America as one of the few regions where sustainably higher oil prices could actually translate into stronger economic growth. The analysis below maps that asymmetry country by country and flags the risks the "regional winner" narrative tends to obscure.
The Winners: energy exporters in an unexpected sweet spot
Three countries stand out as clear net beneficiaries: Brazil, Colombia and Argentina. Each captures the upside differently — and each faces its own set of complications.
Brazil: a net exporter caught in its own paradox
Brazil became a net oil exporter in 2014, and crude now represents 12.8% of its exports, which limits its vulnerability to an oil price surge and positions it as a direct beneficiary. But the political economy is more complicated. The Lula government has scrapped federal taxes on diesel and imposed a 12% tax on crude exports and a 50% tax on diesel exports, seeking to cushion domestic consumers. With a presidential election in October 2026 and tightening polls, Lula now has fiscal breathing room, but at the cost of deepening the structural vulnerabilities the IDB had already flagged before the conflict.
Colombia: the region's most exposed exporter
Colombia is the largest net fuel exporter in the region as a share of GDP, and Bloomberg Economics calculates that if the conflict pushed oil toward $108 per barrel, Colombia would register a boost of close to 0.8% of GDP in its trade balance. The windfall is real but structurally capped by a 2022 fiscal reform that reduced the link between international crude prices and Ecopetrol's financial results. It also lands squarely in the middle of a presidential campaign with a first round on 31 May.
Argentina: the double multiplier
Before the conflict, a $10 per barrel increase had already lifted Argentina's projected energy surplus by approximately $1.3 billion. The main constraint remains infrastructure: transport and evacuation capacity conditions the expansion of production, which limits the magnitude of the benefit from higher prices. The VMOS pipeline is the critical variable for converting the oil price windfall into actual export revenue by end-2026. On LNG, with Qatar having declared force majeure on its gas exports, Argentina finds itself positioned as a leading alternative supplier to Europe and Asia, as detailed in Edition #04 of Latinsight’s Strategic Briefing.
Panama: the unexpected infrastructure winner
Panama Canal Administrator Ricaurte Vásquez has stated that the Iran conflict could drive a significant increase in canal traffic as Asian energy buyers seek alternative LNG sources. If the conflict persists, Asian countries are likely to turn to US LNG suppliers instead of Qatar, and US shippers will use the Canal to shorten the route to Asia. Crucially, the canal is operating at full capacity, with a 50-foot draft every day since October, a sharp contrast to the drought-related restrictions of 2023-2024. Current daily traffic stands at 34 ships, with capacity to absorb an increase to 38. The Canal Authority will also open bidding next month for a $1.6 billion LPG pipeline, scheduled to open in 2031.
US warships cross the strait of Hormuz. The war in the Middle East propelled oil price rises and rattled stock markets around the world. Photo: US Navy
The Risk Side: Importers Under Pressure
Between 27 February and 9 March, the Chilean peso registered the largest depreciation against the dollar within the Latin American currency basket, falling close to 4.6%, the clearest market signal of the asymmetry at work. José Antonio Kast, inaugurated on 11 March at the peak of market volatility, has inherited an immediate external shock. For countries like Chile, Uruguay, Peru, and Central American nations, there is no fiscal capacity to absorb the impact through subsidies and the cost will be passed almost entirely to consumers.
The broader macro dimension is significant. Deutsche Bank characterises the overall market movements as reflecting a stagflationary shock marked by rising energy prices, higher sovereign debt yields, and a decline in most financial assets, with investors reducing the probability of rate cuts and beginning to consider possible increases in some economies. For Latin American sovereign borrowers counting on Fed rate cuts to ease refinancing costs, this is a material deterioration in the external financing environment.
🎯 Strategic perspective
The IEA has reduced its global consumption growth estimates for the year by approximately 25%, to 640,000 barrels per day. For Latin America, the decisive variable remains duration. In a short conflict scenario, exporters pocket a fiscal windfall, Argentina accelerates its LNG projects, and Panama captures a structural increase in transit traffic. In a prolonged scenario, the stagflationary dynamic erodes much of those gains.
For Brazil and Colombia — both in election year — the oil price is not just an economic variable. It is a political one.
❐ DEEP DIVE
Brazil’s Pix: A Fintech Revolution With Regional Ambitions
Launched in November 2020 by the Banco Central do Brasil, Pix has become one of the most successful instant payment systems in the world — faster than India's UPI in adoption, and more comprehensive than Europe's SEPA Instant in scope. In just four years, it has fundamentally restructured how 160 million Brazilians save, spend and transfer money. But Pix is no longer just a Brazilian story. Its model is now actively spreading across Latin America, making it one of the most consequential fintech developments in the region — and a strategic reference point for investors, banks and regulators alike.
💡Key takeaways
Pix processed 63.4 billion transactions worth roughly $5 trillion in 2024, a 51% increase from the prior year, surpassing the combined total of debit and credit card transactions in Brazil for the first time.
Over 160 million Brazilians are registered on Pix — more than half the US population — just four years after its November 2020 launch, making it one of the fastest financial product adoptions in history.
B2B transactions are the fastest-growing segment, up 50% year-on-year in early 2025, and already account for 46% of total Pix transaction value despite representing only 3% of volume, signalling a shift from consumer tool to core business infrastructure.
Brazil leads globally in Open Finance, with 60 million active consents and 100 billion monthly API calls — four times higher than the UK's Open Banking system — positioning Brazilian banks at the frontier of data-driven financial services.
The Pix model is spreading across the region: Colombia's Bre-B launched in June 2025 directly modelled on Pix, and instant payment infrastructure is already available in Panama, Peru, Bolivia, Paraguay, Venezuela and Ecuador through regional partnerships.
Know someone who would benefit from these LatAm insights?
❐ MARKET INTELLIGENCE
❍ AGRIBUSINESS & FOOD SYSTEMS
Brazil: Amazon soy moratorium under threat
Major soy trading firms are moving to drop the voluntary Amazon Soy Moratorium, the industry agreement that has restricted deforestation-linked purchases since 2006, raising concerns about renewed forest clearance. The move comes as the EU Deforestation Regulation (EUDR) enters implementation and demands traceability from Brazilian exporters, creating a direct conflict between industry consolidation strategies and EU market access requirements. (DW)Argentina: new biotech regulation unlocks gene editing in agriculture
Argentina has enacted a new regulatory framework for genetic editing in agriculture, streamlining approval pathways for CRISPR-based crop technologies. The reform positions Argentina as a first mover in agricultural biotech in the region and is expected to attract investment from seed companies and agri-tech firms. (Prensa Mercosur)Colombia: coffee industry optimistic ahead of EU deforestation rule
Colombia's coffee sector — the country's second-largest export — is well positioned on traceability relative to competitors, but remains wary of compliance costs and bureaucratic burdens as the EUDR enters force. Industry leaders warn that smallholder farmers, who produce the majority of Colombian coffee, will bear a disproportionate share of implementation costs. (Mongabay)Argentina: wine consumption hits historic low
Domestic wine consumption in Argentina has dropped to its lowest level on record, as health-conscious consumption trends and rising prices compress demand. The shift is prompting producers to accelerate export diversification, with a particular focus on premium segments targeting European and Asian markets. (Vinetur)
❍ MINING & CRITICAL MINERALS
US pours $1B+ into Latin America critical minerals
The Trump administration has invested more than $1 billion in critical minerals projects across Latin America since January 2025, targeting lithium in Argentina, rare earths in Brazil, and copper across the Andean corridor. The push reflects Washington's effort to reduce dependence on Chinese processing capacity, which controls roughly 70% of global rare earth refining. (Mining.com)Chile: Kast's mining agenda under the geopolitical spotlight
President Kast's inauguration on 11 March introduces a new mining policy agenda — expanded private sector participation, regulatory streamlining, and lower corporate taxes — at the precise moment Chile's copper and lithium resources are being contested between Washington and Beijing. Roughly 40% of Chile's exports go to China, while the US is pushing for preferential supply arrangements under the FORGE framework. (ION Analytics)
❍ MANUFACTURE & INDUSTRY
Argentina: over 50% of manufacturers report activity declines
More than half of Argentina's industrial sector reports falling production and sales, as the combination of import liberalization, peso depreciation and compressed domestic demand weighs on manufacturers. The closure of tyre company Fate (920 layoffs) is part of a broader pattern of industrial restructuring under Milei's economic programme. (Fashion Network)
❍ ENERGY & SUSTAINABILITY
Brazil: free energy market to gain 9,000+ consumers in H1 2026
Brazil's free energy market is projected to add more than 9,000 new consumers in the first half of 2026, accelerating the deregulation of the electricity sector. The expansion reflects growing demand from industrial and commercial users seeking to bypass regulated tariffs and directly negotiate with generators. This structural shift is attracting investment in renewable generation capacity. (BNamericas)Peru: Camisea pipeline repairs at 74% amid gas crisis
Repairs to the Camisea natural gas pipeline, damaged by a landslide earlier this year, have reached 74% completion according to Peru's Ministry of Energy and Mines (Minem). The pipeline supplies the majority of Peru's natural gas and its partial closure triggered a domestic energy crisis that is now receding. Full restoration is expected within weeks. (Infobae)Guatemala: PEG-5 renewable energy tender attracts 40+ bidders
Guatemala's PEG-5 renewable energy tender has attracted more than 40 interested parties, reopening the national debate on transmission infrastructure capacity. The high level of interest reflects Central America's growing appeal as a destination for renewable energy investment, but analysts warn that grid constraints risk bottlenecking new capacity. (Energía Estratégica)Venezuela: strategic deal with Repsol to attract foreign investment
Venezuela has signed a strategic agreement with Spanish energy major Repsol as part of a broader campaign to attract foreign capital following the political transition. The deal signals a cautious re-engagement by European energy companies with Venezuela's vast but neglected oil reserves, though infrastructure deterioration and legal uncertainty remain significant hurdles. (Diario Estrategia)
❍ INFRASTRUCTURE, TRANSPORT & LOGISTICS
Mexico: US firms to invest $500M in electric chargers and buses
US companies are committing $500 million in electric vehicle charging infrastructure and electric bus deployment in Mexico, aligning with the "Plan México" industrial strategy. The investment targets urban transport corridors and logistics hubs, with a focus on northern border cities where nearshoring has driven demand for sustainable transport infrastructure. (Bloomberg Línea)
❍ TOURISM, CULTURE & CREATIVE INDUSTRIES
Costa Rica: Hilton to expand with three new brands
Hilton has announced the addition of three new hotel brands in Costa Rica, reinforcing the country's position as the region's premium tourism destination. The expansion targets the mid-scale and extended-stay segments, reflecting growing demand from business travellers linked to Costa Rica's expanding services export sector and medical tourism. (La República)
❍ DEFENSE & SECURITY
Brazil: defense ministry commits R$30B to strategic military investment
Brazil's defense ministry has defined a R$30 billion ($5.4 billion) investment programme in strategic projects for the armed forces, spanning shipbuilding, cyber defense, satellite communications, and the domestic defense industry. The announcement reflects Lula's effort to assert Brazil's strategic autonomy ahead of the 2026 elections — and signals a significant expansion of the domestic defense industrial base. (Infodefensa)
❍ TECHNOLOGY & INNOVATION
Mexico: ambitious $6.3B investment in hyperscale cloud infrastructure
Amazon, Microsoft and Google have committed a combined $6.3 billion to cloud and data center infrastructure in Mexico. The government's Coatlicue supercomputer — $341 million, 15,000 GPUs — aims to position the country as a regional AI hub. Energy and water availability remain key operational constraints as facilities scale. (Mexico Business News)Chile: first AI regulatory framework in Latin America
Chile has become the first country in the region to implement a comprehensive, risk-based AI legal framework modelled on the EU AI Act. The move creates legal certainty for investors and startups, and reinforces Chile's positioning as the region's premium digital hub — combining regulatory clarity, the world's fastest fixed internet, and a 91% carbon-free energy grid. (Latin Times)
❍ FINANCE & BANKING
Guatemala: why macro stability is no longer enough
Guatemala has maintained macroeconomic stability and fiscal discipline, but analysts argue the country remains stuck below investment grade because structural governance gaps — weak rule of law, judicial independence concerns, and limited institutional capacity — are not captured by fiscal metrics alone. The case is a broader warning for Central American economies: stability without reform does not attract transformative FDI. (República)
❐ POLICY & MACRO WATCH
Colombia: divided congress, wide-open presidential race ahead of May 31
Colombia's legislative elections on 8 March delivered a divided congress, with Petro's leftist coalition maintaining dominance in the Senate while no party secured an absolute majority. The surprise of the day was the strong performance of Paloma Valencia, a close ally of former President Uribe, who won the center-right primary, potentially reshaping the May 31 presidential race by offering voters a less polarising option on the right. With Cepeda (left) and De La Espriella (far-right) skipping the primaries to go directly to the first round, and Valencia now in the mix, the presidential race is the most competitive and unpredictable since 2022. (France 24)USMCA review formally launches — under immediate pressure
The formal USMCA review process started on March 16, 2026, with the first bilateral round of US-Mexico discussions. The review is overshadowed by the USTR's simultaneous launch of Section 301 trade investigations into Mexico for alleged industrial overcapacity and forced labour practices — effectively using tariff threats as negotiating leverage before talks have begun. Mexico's core priorities are to preserve existing rules of origin, strengthen dispute settlement, and minimise unilateral tariff exposure. At stake: $1.6 trillion in annual trilateral trade. (USTR)Mexico: Banxico raises GDP forecast to 1.6% for 2026
Mexico's central bank has revised its 2026 GDP growth forecast upward to 1.6%, reflecting stronger-than-expected domestic consumption and a partial recovery in investment. The revision comes with significant caveats: USMCA review uncertainty, the Iran oil shock's impact on US consumption, and structural investment weakness identified by the IDB remain headwinds. (El Financiero)Colombia: gas pipeline revival signals pragmatic turn on Venezuela
The Colombian government is seeking to revive a pipeline to import gas from Venezuela, a pragmatic infrastructure move that sits uneasily alongside Petro's ideological alignment with Maduro and Washington's pressure on Bogotá to take a harder line on Venezuela. The decision reflects Colombia's looming gas reserve crisis analysed in this edition's Deep Dive — and is likely to be a flashpoint in the May presidential campaign. (Bloomberg)
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