Welcome back to Foreign Policy’s Latin America Brief.

The highlights this week: Regional oil exporters show resilience amid the Strait of Hormuz crisis, Honduras rethinks its plans to recognize Taiwan, and Argentina advances to the World Cup final.

Latin America’s Petroleum Power

Disruptions in the Strait of Hormuz caused by the Iran war have underscored the economic muscle of a handful of Latin American countries that are experiencing oil export booms, including Argentina, Brazil, and Guyana.

The region’s relative geopolitical neutrality and distance from the conflict has made its oil more attractive to global buyers during the crisis, part of a rewiring of energy sales that International Energy Agency Executive Director Fatih Birol described in Foreign Policy this month.

While energy importers are hurting, some South American oil exporters have announced positive economic numbers. Last week, the International Monetary Fund (IMF) projected that Brazil’s growth this year would be 0.5 percent higher than it had calculated in April. That is despite U.S. tariffs, which Washington said this week that it will hike to 25 percent on many Brazilian goods.

Though the IMF did not issue updates on Argentina or Guyana, April estimates suggest that their economies will grow by 3.5 percent and 16.2 percent this year, respectively. Argentina paid off a $4.3 billion chunk of its foreign debt last week, defying doubters of President Javier Milei’s economic overhaul; in June, inflation slowed to its lowest level in 10 months.

“The oil prices are definitely helping Argentina’s macro position,” said Luisa Palacios, a senior research scholar at Columbia University’s Center on Global Energy Policy.

Because oil is sold in dollars, the exports have allowed Argentina’s central bank to increase its dollar reserves. But oil exporters that also import large amounts of natural gas, such as Mexico and Colombia, have not reaped the same financial benefits.

After Brazil’s oil exports also initially rose at the start of the conflict, the Brazilian government took a unique approach. In mid-March, it slapped a 12 percent tax on oil exports to subsidize fuel for domestic users. The exports fell, but so too did inflation—an important metric in an election year.

Brazil’s export tax has triggered a debate in the country. A handful of oil companies are challenging the measure in court, calling it illegal and saying it worsens the investment climate. Some environmentalists, meanwhile, are calling on the left-leaning government to use its newfound comfort with taxing fossil fuels to help fund the green energy transition.

The climate group 350.org has urged lawmakers in the governing coalition to include such taxes in a bill that was introduced in May but had no luck, according to the organization’s Brazil director, João Cerqueira. “Our idea is to treat this as a priority issue,” he said, noting that President Luiz Inácio Lula da Silva said last year that he wanted to use oil sector money to fund the country’s energy transition.

In 2024, less than 0.2 percent of Brazil’s oil royalties and other fees paid to the government were spent on environmental and climate-related projects, according to the Institute for Socioeconomic Studies, a Brasília-based think tank.

Whether it’s to help pay back foreign creditors or to help control domestic oil prices, Latin America’s net energy exporters are feeling their political power in this moment of global economic strain.

Amid such a fossil fuel boom, it may seem that there is no momentum in Latin America’s energy transition. But if energy sales help Latin American countries achieve macroeconomic resilience, that could help their transitions move forward, Palacios said. In shaky economies, banks usually charge higher interest rates, which makes it harder to roll out green investments.

Even though Milei is far from a climate hawk, the economic upside of renewables is clear enough to Argentines that two Buenos Aires-based power companies that work with green energy are vying to be the country’s first IPOs on the New York Stock Exchange since 2019. It’s not only oil sales that are moving forward in the region, Palacios said—electrification is, too.

Upcoming Events

Friday, July 17, to Friday, July 24: Talks to develop rules on deep-sea mining continue at the International Seabed Authority in Kingston, Jamaica.

Sunday, July 19: Argentina faces Spain in the FIFA Men’s World Cup final.

Monday, July 20: The United Nations Security Council discusses Haiti.

What We’re Following

U.S.-Cuba talks. Former Cuban President Raúl Castro’s grandson, Raúl Guillermo Rodríguez Castro, told USA Today last week that Cuba’s leadership authorized him to negotiate with the United States about changes on the island.

Many observers have interpreted this as Rodríguez Castro’s attempt to position himself as something like a Cuban equivalent of Venezuela’s acting leader, Delcy Rodríguez, who held quiet talks with the United States ahead of the Jan. 3 ouster of Venezuelan President Nicolás Maduro.

Rodríguez Castro’s statement comes as the economic crisis in Cuba extends and an increasing number of U.S. lawmakers speak up about it. Four Democratic legislators visited Cuba last week, and one compared the U.S. fuel blockade on the country to a “silent Gaza.”

Democrats have generally signaled more willingness than Republicans to engage with the Cuban government. Rep. Alexandria Ocasio-Cortez met quietly with Cuban President Miguel Díaz-Canel in 2023, Jonathan Guyer wrote in Foreign Policy this week.

Honduras wavers on Taiwan. Honduran President Nasry Asfura’s administration is distancing itself from a campaign trail promise to drop the country’s 2023 diplomatic recognition of China in favor of formal relations with Taiwan. U.S. President Donald Trump backed Asfura ahead of his November election, in which both leading candidates made pro-Taiwan pledges.

But Foreign Minister Mireya Agüero said this month on an interview show that the government’s decision will not be based on campaign promises and that Honduras had not opened formal talks with Taiwan. Any such decision would need to be made with an eye to consequences for Honduran exporters, Agüero added.

Seven countries in the Americas diplomatically recognize Taiwan, including a handful in the Caribbean and Central America as well as Paraguay. Washington has generally looked favorably on this position. Agüero said the decision would be based on Honduras’s national interest and not determined by the United States.

Argentine forward Lionel Messi and English forward Harry Kane fight for the ball during the 2026 Men’s World Cup semifinal match between Argentina and England at the Atlanta Stadium in Atlanta, Georgia, United States, on July 15.Roberto Schmidt/AFP via Getty Images

Argentina prevails over England. Argentina faces former colonizer Spain in the FIFA Men’s World Cup final on Sunday in New Jersey. But the matchup is not as symbolically loaded as its semifinal battle against England on Wednesday, which the Argentine team—nicknamed the Albiceleste—won 2-1.

Argentina and England have a soccer and political rivalry that stretches back decades. Observers of Argentine politics might know that the 1986 World Cup quarterfinal between the two came after the Falklands War between the two countries. In that game, Argentine star Diego Maradona scored a goal with his hand that would not have survived today’s video assistant referee process.

But the two countries’ history goes back even further. Britain invaded present-day Argentina in the early 19th century, and British migrants had enormous influence in the beginnings of Argentine soccer culture—so much so that top Argentine club team names, such as Racing and Boca Juniors, still include English words.

The countries’ intertwined story includes myriad bitter moments. During the 1966 World Cup, which England ultimately won, an Argentine player said he was denied an interpreter to understand the referee and refused to follow a command to be sent off the field. England’s manager later called Argentine players “animals.”

This long history helps explain some of the animosity on the soccer pitch on Wednesday night—and Argentina’s drive to come from behind to win late in the second half, a trend for the team at this year’s tournament. If they can do it one more time, they will be back-to-back world champions.

Question of the Week

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In Focus: Venezuela’s Information Gap

A man walks past a collapsed building in Catia La Mar, Venezuela, on July 16.Raul Arboleda/AFP via Getty Images

A little more than three weeks after Venezuela’s June 24 earthquakes, efforts to calculate the damages remain clouded by an information gap.

On Wednesday, Venezuela’s government raised the death toll to 4,829. It has not issued estimates of how many people remain missing after the disaster, who also could have been killed; late last month, the International Rescue Committee estimated that number totaled almost 50,000.

Despite moderate political liberalization since Maduro’s removal in January, some Venezuelan journalists have been intimidated while reporting on the quake, and several news outlets remain blocked on the Venezuelan internet, Efecto Cocuyo’s Luz Mely Reyes testified in a U.S. congressional hearing this week.

Aid groups and donor countries have pledged more than $781 million since the earthquake, according to civil society organization Transparencia Venezuela. Though some international aid workers are still on the ground helping to identify bodies and trying to ward off threats such as disease from contaminated water, other teams have left.

The Rodríguez administration has maintained strict controls on which sites aid workers can access. In recent days, the government caused a stir when it imposed a new fee on an Uruguayan aid plane that sought to land in Venezuela, according to Uruguay’s government. The aircraft delayed its trip for a few days but was able to negotiate away the fee.

As Venezuela’s stopgap recovery continues, this week brought some political movement. The government announced that on Aug. 1, it will begin negotiations with some opposition figures, including Dinorah Figuera, who recently returned to the country on a U.S. invitation.

Though it did not give specifics, an opposition statement said the talks would cover “a route map towards democracy.”