SANTIAGO, Chile (CMC)—The Economic Commission for Latin America and the Caribbean (ECLAC) on Friday warned that the average price of oil this year will be higher than in 2025, which means that six channels of impact on the region remain in effect.

In a special report released in Chile, ECLAC examines the channels through which the global economy – and Latin America and the Caribbean in particular – have been affected by the hostilities initiated on February 28, 2026, in and around the Islamic Republic of Iran, and the de facto closure of the Strait of Hormuz.

“The hostilities between the United States and Israel, on the one hand, and the Islamic Republic of Iran, on the other, reveal once again the magnitude of the global economy’s interdependence and the swiftness with which disruptions and shocks are transmitted across countries and regions. There are multiple transmission channels.

“However, these channels do not operate uniformly; their impact depends on each economy’s form of international integration, its production structure, and its trade and financial ties with the rest of the world,” said ECLAC’s Executive Secretary, José Manuel Salazar-Xirinachs.

ECLAC said that the study is being published in a context of uncertainty regarding diplomatic advances.

Last month, the presidents of the United States and Iran signed a memorandum of understanding aimed at putting an end to the military attacks, lifting the naval blockade of Iranian ports and reopening the Strait of Hormuz to commercial traffic, in addition to establishing a 60-day window for negotiating a definitive accord.

However, on July 6, there were renewed hostilities, and two days later, at the NATO Summit in Ankara, Türkiye, President Donald Trump expressed doubts about whether the ceasefire agreement had ended.

ECLAC warns that even if recent diplomatic advances hold, that does not mean there will be an immediate normalisation of markets, nor does it invalidate the direction and types of impacts identified in the report.

It said that the normalisation of production activity in Persian Gulf countries and of trade flows through the Strait of Hormuz will take time and that, as of late June, traffic through the strait remained below its usual levels, in a context in which security risks persist along with logistical disruptions and high maritime insurance premiums for the ships that are moving through the area.

The report adds that regardless of how prices for energy goods evolve in the coming months, the average for 2026 will be higher than in 2025: taking the prices effectively observed through June and assuming a Brent benchmark price of US$75-80 per barrel for the rest of the year, the annual average in 2026 is forecast to be 20 to 25 per cent higher than the US$69 per barrel registered in 2025.

In addition, while some of the effects of higher energy prices are already set in between March and June, others – which tend to lag – will continue to unfold throughout 2026.

In its report, ECLAC identifies six channels for the transmission of impacts to Latin America and the Caribbean: two that could be positive, although not necessarily for net exporters of energy, but that are adverse for countries that are not net energy exporters (the trade and fiscal channels), and four that are adverse for all of the region’s countries.

The first transmission channel is the trade channel. In addition to the indirect effects stemming from disruptions in supply chains and the increased logistical costs of international trade, the conflict has a direct impact on Latin America and the Caribbean’s trade balance through the variation in the prices of energy and other exported or imported goods.

The increase in energy prices improves the trade balance of net exporters of energy and deteriorates that of net importers, which accounts for the vast majority of the region’s countries in numerical terms.

In a scenario of oil prices that are 25 per cent higher than in 2025 – which is the report’s base scenario – the trade balance impact is slightly positive for Latin America and the Caribbean as a whole (+0.05 percentage points of gross domestic product (GDP) in 2026) and for South America (+0.13 percentage points).

But it is negative for non-hydrocarbons-exporting Caribbean countries and for the group made up of Central America, Haiti and the Dominican Republic, -0.5 and −0.9 percentage points, respectively.

ECLAC said the second transmission channel is the fiscal one. Some governments have opted to absorb part of the shock of energy prices by reducing fuel taxes or using other mechanisms to protect the purchasing power of households.

In the countries that are net energy exporters, the increased fiscal revenue resulting from these goods’ higher prices serves to partially cushion that fiscal cost, but for net importers, that increased expenditure is not offset by higher revenue and leads to further deterioration of fiscal accounts.

There are four more channels, however, that have negative impacts for net energy exporters and net energy importers alike: the price channel (inflation), the cooling of global economic activity, the financial channel and that of monetary policy.

According to ECLAC, the rise in the price of fuel erodes household purchasing power throughout the region, both directly – due to its weight in the consumption basket – and indirectly, by making the transportation and distribution of other goods more costly.

It said this is compounded by the direct increase in fertiliser prices; the supply of fertilisers, like that of oil and gas, is largely concentrated in the Persian Gulf, which puts upward pressure, with a certain time lag, on food prices and increases the risk of greater food insecurity in the region.

In addition to this pressure on domestic prices, there is a channel linked to cooling global economic activity: the conflict has affected global growth prospects, and the more they deteriorate, the lower the region’s external demand will be.

A fifth channel is the financial one. Inflationary pressures in advanced economies lead their central banks to keep interest rates high for longer than expected, making external financing more expensive for the region.

At the same time, the increase in geopolitical uncertainty is associated with greater demand for assets that are considered to be safer, which strengthens the dollar and pressures the currencies of the region’s countries.

Finally, the sixth transmission channel is that of monetary policy. As a result of inflationary pressures, in several countries of the region that were reducing their policy interest rates, it is expected that those cuts will continue but at a more gradual pace, which could have an impact on economic activity.

The ECLAC’s special report indicates that while Latin America and the Caribbean appear to be in a more favourable relative position than other regions vis-à-vis this external shock, due to its relatively low direct trade exposure to Persian Gulf countries and because some of its major economies are net exporters of hydrocarbons, that aggregate position obscures significant heterogeneity.

“The majority of the region’s countries, which are net importers of hydrocarbons, receive negative impacts from this shock through all the transmission channels,” ECLAC added.