The war between the United States and Iran is sending global oil and gas prices soaring, but Argentina is beginning to benefit. Surging output from Vaca Muerta is turning the country into a net energy exporter, allowing it to profit from a global energy shock that would once have only strained its economy.
After years of investment and infrastructure bottlenecks, Argentina’s unconventional oil and gas boom is starting to shift its external position. Instead of higher energy prices simply adding pressure to a fragile economy, they are now delivering an export windfall and improving the trade outlook.
In February, Argentina’s oil production rose 15.8 percent year-on-year to 874,000 barrels per day, driven mainly by unconventional shale output from Vaca Muerta, according to the Economy Ministry. Oil production is expected to climb to one million barrels per day by the start of 2030, according to the Chamber of Exploration and Hydrocarbon Production, known as EPH.
“The shift is more structural than cyclical, driven by unconventional oil exports from Vaca Muerta,” Martín Castellano, an economist at the Institute of International Finance, told the Times in an interview.
Argentina could begin to consolidate itself as a reliable energy exporter, Castellano said, if market participants come to believe that the regulatory framework governing the oil and gas sector will remain stable, regardless of which administration is in power.
Brazil, like Argentina, will also benefit from stronger export revenues and improved external balances as net energy exporters, even if part of that gain is offset by rising fertiliser and other input costs.
According to the Institute of International Finance (IIF), every US$10 increase in oil prices generates an estimated US$4 billion gain for Brazil, equivalent to around 0.2 percent of GDP. For Argentina, the institution estimates roughly US$1.7 billion for Argentina, or about 0.25 percent of GDP. The comparison underscores how much Argentina’s position has changed – while Brazil’s offshore pre-salt output has long made it a beneficiary of oil shocks, Vaca Muerta is now pushing Argentina into similar territory. Whereas a few years ago, a comparable jump in prices would have weakened Argentina’s external position, now it supports it.
That shift is already beginning to show up in Argentina’s external accounts. Argentina is expected to post an energy surplus of more than US$14 billion in 2026, up from US$12.7 billion in 2025 and US$9.6 billion the previous year, according to the Macroview consultancy firm. Higher oil and gas prices linked to the Iran conflict are likely to reinforce that trend.
Brent crude has climbed to around US$100 a barrel and WTI (West Texas Intermediate) to roughly US$101.38 as of March 31 – an increase of around 60 percent from levels seen just before the outbreak of war on February 28.
“We believe energy exports should help contain Argentina’s current-account deficit, keeping it to around one percent of GDP in 2026,” Castellano said. Higher energy prices could also support other Argentine exports through spillover effects on commodities such as soybeans and wheat.
However, there is also a downside. The same rise in global energy prices that improves Argentina’s export outlook could complicate President Javier Milei’s effort to bring inflation lower.
Milei, who took office in December 2023 with Argentina in the grip of triple-digit inflation, has slowed price hikes to less than three percent a month, though a slight acceleration has been witnessed in recent months.
Since March 2026, gas and diesel prices have risen by between six and nine percent, while the country’s dependence on imported fertilisers could also hit the agricultural sector through higher input costs. The IIF says higher oil prices will make it more difficult for headline inflation in Argentina to fall below 30 percent in 2026.
Macroview expects monthly inflation in March to come in at three percent, with the annual figure at 32 percent.
Despite this complication, Argentina is entering this latest oil shock in a far stronger position than in the past. Where higher energy prices once mainly meant pressure on the balance of payments, they now also bring a meaningful gain in exports.
Although the immediate effect may be mixed, helping the external accounts while complicating disinflation, the broader trend is becoming increasingly clear. As Vaca Muerta scales up, Argentina is becoming one of the few countries in the region that may be able to turn turmoil in global energy markets into an economic advantage.
Comments