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Oil Boom Falls Flat in Region With a Fifth of World’s Reserves

Latin American countries struggle to boost output as fuel inflation sparks political turmoil

A Petrobras floating, production, storage and offloading (FPSO) vessel anchored in Angra dos Reis, Rio de Janeiro state, Brazil.

A Petrobras floating, production, storage and offloading (FPSO) vessel anchored in Angra dos Reis, Rio de Janeiro state, Brazil.

Photographer: Dado Galdieri/Bloomberg
Corrected

From Saudi Arabia to West Texas, drillers are pumping more oil to cash in on a scorching price rally. But a region that’s home to a fifth of the world’s crude reserves is mostly missing out. 

All over Latin America, the upside of  $100 crude has been blunted by nationalist policies that tightened government control of the energy industry and sidelined the foreign investors who had helped boost production. Output from Brazil and Guyana is rising, but across the region as a whole, production has fallen so much that it’s now barely meeting demand there. Mexico and Argentina import more crude and natural gas than they export, a reversal from the last oil boom a decade ago.