Latin America will have a crucial year in 2026, as rising oil production and new US tariffs reshape its economic and energy outlook.
Some analysts say that a combination of moderate trade barriers combined with an increase in crude oil production can give certain countries a competitive advantage while creating obstacles for other nations.
Alejandro Grisanti is the chief economist of Ecoanalitica, a Dominican Republic-based firm. He told ICD the unbalanced tariff system has already produced winners and losers.
Grisanti stated that “most Latin American countries experienced a mere 10% rise in tariffs. This was especially true for Central America and Caribbean with Nicaragua as an exception.”
The Dominican Republic and other nations that have lower tariff increases can gain an advantage by raising them more than European exporters who face higher taxes.
Some economies will not benefit. Mexico is facing tariffs as high as 25% while Brazil faces increases as large as 50%. This combination could weigh on US trade.
Venezuela, Bolivia, and Nicaragua all saw tariffs increase by around 15%. This reflects a mix of political and economic considerations.
Grisanti stated that negotiations are still ongoing. He expects the tariffs for Latin America to be settled in a range of 10%-15%, which he called a positive net for the area.
The impact of tariffs is less than expected
The US pursued a 2025 policy that included imposing broad-based increases in tariffs on imports coming from Latin America.
Early consensus predictions pointed towards a rapid contraction of trade in the near term. However, data from subsequent months showed that exports continued to grow, with a resilient pricing and demand dynamics.
Reuters cites a report by the United Nations Economic Commission for Latin America & the Caribbean dated November 2025, which shows that trade between Latin America & the Caribbean is expected to continue to grow in 2025 despite a new US tariff system. Values are forecast to increase by about 5% from 4,5% in 2024.
This increase is largely due to a rise of 4% in export volume and modest gains in net prices.
Report: The report found that the immediate effect of tariff increases was less than anticipated, because US companies increased imports, built up inventories in advance of their enforcement and trade with Asian markets continued to be robust.
ECLAC data on air transportation also revealed that the average US tariff for exports to Latin America and Caribbean was around 10%. This is roughly seven points lower than the average global rate.
Latin America is a hub for oil production
Latin America will be the main oil supplier in 2026. This is not just about trade. It’s also going to reshape global energy markets, and challenge traditional producers.
Oxford Economics predicts that the region’s new production will be around 1.6 million barrels a daily, which makes it the biggest contributor of incremental supply other than OPEC+.
Brazil will lead this growth with Petrobras pre-salt off shore developments. Total production is projected at 5.5 millions barrels per day.
Guyana’s oil industry is expanding quickly through ExxonMobil, which controls the Stabroek Block. This makes the country a major new player on the global market.
Argentina increases its supply by improving efficiency in Vaca Muerta. This strengthens South America’s position as a medium and light crude producer.
Mexico is one of several countries that are experiencing a stagnation or marginal growth in output due to the matured fields, low investment, and regulatory restrictions.
Global Context
US oil production will increase more slowly globally, with an estimated 400,000 barrels per day. This is mainly due to productivity improvements in the shale industry.
OPEC+, which includes Saudi Arabia, the UAE and other members of the group, is expected to increase production by around one million barrels a week in mid-2016. The Russian production is predicted to stabilize before falling as the sanctions and technical limitations take effect.
Prices are expected to be affected by the combined global increase in supply.
Oxford Economics predicts Brent crude to fall to $55 a barrel in 2027 and $58 by 2026, assuming disciplined OPEC+ production and capital restraint from US shale oil producers.
Latin America: Implications
Combining moderate tariffs with rising energy production can give Latin American economies an advantage.
For example, the Dominican Republic benefits from small tariff increases which improves its competitiveness in comparison to European exporters.
Brazil, Guyana and Argentina will benefit from increased oil revenues as well as their growing geopolitical importance. Argentina’s consistent output growth also adds to the resilience of the region. Mexico and Brazil are facing tougher circumstances due to increased tariffs and political issues at home.
Grisanti stated that the impact of tariffs on trade and investments could be uneven.
Some economies benefit from global cost increases that are uneven. Tariffs stabilizing at moderate levels in most Latin American nations will benefit the entire region, both from a trade and energy perspective.
Perspective for 2026
Latin America faces both opportunities and risks as it enters the year 2026. The rising oil production is increasing revenues and influence globally, while well-managed trade relations give select countries an edge.
Investors and policymakers will closely monitor US trade negotiations, the energy sector expansion, and geopolitical changes.
If the current trend continues, this region may become a significant energy provider and more competitive in international trade.
The countries that are able to successfully combine energy growth and strategic trade policy may be rewarded with long-lasting advantages. This could mark a turning point for Latin America’s economic trajectory.
This intersection can be seen in the outlook for 2026. A combination of US tariffs that are moderate and the surge in oil production by Brazil, Guyana, and Argentina opens up a growth window.
Grisanti stated that countries who are able to adjust to these changes have the opportunity to reposition within global energy and trade markets.
If Latin America is well-planned, it could become a major energy hub in the world and an area with a competitive trading environment by 2026.
The post Why 2026 may be a pivotal year in Latin America’s energy and trade markets could change as new information becomes available
