Oil resources in Latin America and the Caribbean are increasing the region’s global importance not only through US-China competition but also through tensions between Argentina and the United Kingdom. The launch of new fields in Brazil, Guyana, Argentina and Venezuela is among the developments that could affect oil supplies and energy diplomacy.
The Sea Lion project brings Argentina-UK tensions into the energy arena
The Sea Lion project being developed in the Falkland Islands brings energy resources and the sovereignty dispute together on the same ground. The project is estimated to contain 314 million barrels of proved and probable reserves, while the initial investment is expected to be approximately $1.8 billion. First production is expected to begin in March 2028, with capacity reaching 50,000 barrels per day.
Argentine President Javier Milei has moved to accelerate sanction mechanisms targeting companies operating on the project. On September 4, 2026, Milei signed two decrees paving the way for sanctions against 45 foreign companies and shareholders. The companies involved in the project argue that their licenses are backed by the United Kingdom government.
Venezuela’s oil emerges as a major issue in US-China rivalry
Venezuela’s oil resources stand out in terms of the regional ramifications of the rivalry between Washington and Beijing. Venezuela’s oil shipments to China, US influence over the country’s energy sector and new investments are among the factors shaping assessments that the economic and political balances in Latin America could change.
Rather than creating a single power bloc, developments in the region could intensify the overlapping tensions between Argentina and the United Kingdom, the United States and Venezuela, and the United States and China around the same resources. Whether Latin American countries can use the growing international interest to advance their own economic and political interests will be decisive.
