Spike in oil prices opens mixed bag for Argentina

The spike in oil prices caused by the U.S. and Israel’s attack on Iran could fuel inflation in Argentina and, at the same time, positively impact the country’s foreign accounts, according to analysts. This week, Brent crude’s price surpassed US$100 a barrel for the first time in nearly two years, although on Monday it went down to around US$80 after U.S. President Donald Trump announced the “war is very complete, pretty much.” Pablo Repetto, head of research at broker Aurum Valores, said that the shock “in the medium and long term is positive for Argentina” because the country now has the possibility of exporting from a less conflictive place in geopolitical terms, “with a good natural resource to be a reliable supplier to the world.” However, he added, the price increase has “less positive short-term consequences, such as the impact on inflation and economic activity.” Gas is on the rise Gas prices in Argentina have already seen a 6% hike since the start of the hostilities. Horacio Marín, the CEO of state-owned energy company YPF, Argentina’s main gas producer, said the firm would “not cause fuel price shocks.”  “We are working with a micropricing strategy to analyze prices on a daily and weekly basis, and through the moving average system, we will be able to mitigate peaks and troughs, giving consumers greater predictability and a more stable price,” Marín said in a post on X. A spokesperson for YPF said the company sets fuel prices based on the weekly average barrel price, among other factors. “The barrel was at US$114 this morning, and now, it’s US$89 — imagine if we had increased the prices accordingly!” the representative told the Herald, saying that those impacts did not immediately affect the price at gas stations. “To prevent the pump price from constantly changing, as is the case in other countries, what we do is wait. That doesn’t mean prices are not moving, but rather the entire increase is not being transferred to the pump at a single moment. During the week, prices will be adjusted to reach a new parity,” he said, saying this method avoids peaks. A report by consulting firm 1816 said that, beyond the relatively negative financial impact of international volatility, the new energy prices will have a significant positive impact on Argentina’s external accounts. “A month ago, with oil at US$60 per barrel, the government estimated an energy trade surplus of US$10 billion in 2026 and US$15 billion in 2027,” the report said. “Those figures may now be outdated given current prices — and if energy prices ultimately stabilize at 20% above current levels, those figures could reach US$ 12 billion and US$ 18 billion, respectively.”