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Oil prices complicate Latin America outlook

Wednesday, January 21, 2015

Subject

'Winners' and 'losers' from the recent collapse in oil prices.

Significance

The recent precipitate fall in crude oil prices, with the Brent crude price falling below 50 dollars/barrel in January (less than half its September 2014 level), is clearly having a major impact around the world. In Latin America, which includes both oil importing and exporting countries, there will be winners and losers from this development, although in some cases the oil price impact is likely to prove more nuanced.

Impacts

  • Plunging oil prices are compounding doubts surrounding the regional hydrocarbons sector.
  • The effect on investment decisions will have a longer-term impact on the region.
  • The development of alternative energies in Latin America will be hit by the lower prices.
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