The intensification of hostilities in the Middle East, subsequent to the coordinated military action by the United States and Israel against the Iranian regime, has once more subjected the oil market to significant strain and prompted inquiries regarding the trajectory of crude oil prices in the near future. The emphasis lies on the possible ramifications for global supply chains and, notably, on the strategic significance of the Strait of Hormuz. In this context, the fluctuations in international oil prices may yield significant implications for the Argentine economy, particularly regarding energy exports and the expenses associated with gas imports. Analysts, however, contend that it is premature to reach definitive conclusions. Aleph Energy indicated that the current regional tensions have re-emphasized the inherent structural risks within the global energy system, especially in regions critical to hydrocarbon trade. The report indicates that the oil market was exhibiting signs of strain in the weeks preceding the conflict. During that period, the price of crude oil had risen by nearly US$10 per barrel, reaching over US$60, reflecting investor sensitivity to any indication of instability in the Middle East. This movement foresaw possible disruptions to global supply chains and heightened volatility in international markets. The initiation of military action has exacerbated the prevailing uncertainty, particularly in light of the region’s critical importance to the global energy supply chain. Wholesale gasoline prices increased by roughly 4% in international markets at the start of Monday. Diesel futures experienced a notable increase of 12%. Julián Rojo stated that “any permanent impact is still uncertain.” He added “Nothing can be said about a change in the structural conditions of the market (price levels and quantities) that would permanently affect Argentina.”
Consequently, the potential impacts should be examined in the near term. Multiple elements are at work in this scenario: the length of the conflict, the potential for regime change or stability, and notably, the approaches taken by Russia as a producer capable of response, alongside China’s role as a consumer of Iranian oil. According to sources, there are no current plans to increase fuel prices at the pump, as a recent uptick is not deemed a dependable basis for making such decisions. “There may be fluctuations up and down; we’ll see when prices stabilize,” they articulated. In the interim, a prominent producer within the nation’s principal oil field, Vaca Muerta, refrained from providing any commentary. In assessing the implications for Argentina, it is essential to evaluate the advantages and disadvantages associated with a significant increase in crude oil prices. Rojo posits that “a significant increase in the price of oil has a positive impact on production, especially for exportable surpluses.” However, the circumstances remain ambiguous for the domestic market, which constitutes 70% of Argentine crude oil sales. “In that case, it will depend on the capacity to transfer increases in the price per barrel to consumers at the pump: if these increases are transmitted, there could be upward pressure on the final price at the pump, potentially affecting sales (assuming the increases are substantial),” he explained. Vaca Muerta becomes the focal point of attention as oil and gas prices experience significant fluctuations. In the energy market, certain observers interpret the price increase as advantageous, given that profitability in the sector necessitates a price per barrel exceeding US$50. However, some contend that international instability may dissuade investment from emerging economies such as Argentina. A report highlights that the country, characterized by its limited dollar reserves, ranks among those most vulnerable to global tensions.
“From a macroeconomic perspective, the relevant effect for Argentina is observed in the terms of trade.” The nation confronts this price shock with a notably elevated supply elasticity compared to earlier instances, including the episode preceding the Russian invasion of Ukraine in 2022. “The sustained growth of unconventional production in Vaca Muerta means that the impact is not limited to improved prices, but is amplified by higher export volumes,” said Gustavo Araujo. He added: “In quantitative terms, a sustained increase in crude oil prices has direct effects on Argentina’s energy trade balance, export tax revenue, and foreign exchange earnings.” At the microeconomic level, firms such as Vista Energy, YPF, and Pampa Energía experience the impact via increased export revenues, enhanced operating margins, and bolstered investment capacity. Ultimately, he posited that “the key to analysis lies in the persistence of the new price level.” Should the conflict lead to a lasting change in the geopolitical risk premium reflected in the oil market, Argentina may achieve a structural enhancement in its external position. If, conversely, it is a temporary fluctuation, the effect will be confined to a short-lived enhancement in outcomes and anticipations. Gustavo Delbon, Risk, Structuring and Capital Markets Manager at RICSA Alyc, expressed concern regarding the indeterminate duration of the conflict, noting that an extended timeline could yield increasingly adverse impacts on the global economy, which would subsequently affect Argentina. “Should the conflict reach a swift resolution, one can anticipate a stabilization of prices in the forthcoming weeks. “If it lasts more than four weeks, it could have significant effects,” he stated. Particular attention ought to be directed towards Liquefied Natural Gas. Import prices approaching winter may influence the trade balance and, in turn, inflationary pressures. Nonetheless, one could argue that the exports present a favorable aspect.
Daniel Dreizzen remarked that “with the rise in international oil prices, exports increase.” For each dollar increase in price, Argentina’s trade balance sees an enhancement of US$125 million. Consequently, should the US$10 increase persist, we are discussing an increment exceeding US$1.2 billion. The impact on LNG is negligible due to Argentina’s reduced imports of gas. “If prices hold, in the long run it is beneficial because the objective is to export oil and gas.” However, it is essential to assess whether this is sustainable, a notion I find unlikely. “Because stability could lead to a price decline below pre-war levels, which would be detrimental,” he estimated. Concerning the price at the pump, the expert indicated that with a stable dollar, there might be a transmission to prices, yet emphasized that this “is a political decision.”. Nicolás Kohn states, “the new escalation in the Middle East reintroduces a risk factor with a real capacity to alter relative prices, inflation expectations and global valuations.” The specialist elucidates that “for the markets, the sequence is well-known: higher oil prices imply higher inflation expectations, higher real interest rates, a stronger dollar, and compressed multiples in risk assets.” The critical aspect lies not solely in the price per barrel, but in its sustained nature. A modest uptick may catalyze sector rotation towards energy, defense, and hedging assets such as gold. A prolonged move, conversely, reignites the discussion surrounding the trajectory of U.S. inflation and may prompt a reassessment of valuations in equities, emerging market debt, and corporate credit.
He emphasizes that “this last scenario does not seem the most likely and the market reaction today suggests a rather limited impact, although the scenario remains very fluid at the moment.” Adam Hetts stated that oil prices “are likely to rise, but to manageable levels.” He added, “While oil has traded mainly in the US$60-US$70 range over the past 12 months, prices have already broken above $70 and are expected to continue rising. These moves are noteworthy; however, they do not currently raise substantial concerns within the larger framework of investment implications. A sustained increase to US$80 would align with the June 2025 conflict, while US$90 would correspond to the April 2024 conflict, during which global markets largely overlooked price hikes due to the swift resolution of the conflicts. One of the primary areas of concern is the potential for disruptions to transit through the Strait of Hormuz. About one-third of global oil traffic and nearly one-fifth of the world’s gas trade traverse this waterway. Any partial blockage, logistical delay, or increase in transportation costs exerts an immediate influence on international prices. Aleph Energy, a consulting firm, cautions that in such contexts, markets often exhibit an overreaction to uncertainty, leading to sharp price surges that may not accurately represent an actual supply shortage, but are instead driven by expectations and speculative activities. On Monday, the following events transpired. Another critical element is Iran’s position in the global energy market. Aleph Energy’s analysis indicates that the country stands as one of the foremost producers globally, achieving an output close to four million barrels per day. A substantial share of that volume is allocated to Asian markets, positioning the region as a pivotal center for global energy trade. The liquefied natural gas market may similarly experience repercussions should the uncertainty surrounding shipping routes persist.
For Argentina, the trajectory of international oil prices may yield a combination of impacts on the economy. The analysis indicates that should crude oil prices remain elevated, the nation may enhance its energy trade balance in 2026, driven by an increase in exports. Prior to the onset of the conflict, the increase of US$10 per barrel had already elevated Argentina’s anticipated energy surplus by roughly US$1.3 billion. This action resulted in an estimated energy surplus approaching US$10 billion. Should prices persist in their upward trajectory, the surplus may expand correspondingly. The effects will vary significantly among different segments of the energy sector. An enduring rise in the global price of gas would suggest elevated import expenses for Argentina, particularly during periods of peak demand. In the long term, a scenario characterized by elevated prices may bolster projects associated with LNG, as these initiatives rely on a more robust international market to maintain competitiveness. Aleph Energy’s analysis indicates that the global energy market is currently experiencing a phase characterized by volatility. In the near term, uncertainty and speculative activities associated with geopolitical factors are prevalent. Commodity analysts generally concur that the medium-term outlook is bearish, albeit with volatility becoming the prevailing condition. Financial institutions such as JP Morgan are projecting Brent crude to reach US$60 per barrel. Goldman Sachs anticipates that following an initial increase, the price will subsequently decline below that level in the final quarter of the year. In the medium term, however, the conflict may expedite alterations in supply strategies, trade routes, and energy investment decisions on a global scale. The implications for Argentina will largely hinge on the trajectory of crude oil and gas prices in the forthcoming months, particularly in a context where the Middle Eastern conflict underscores the significant influence of geopolitical dynamics on the energy market.