From the Persian Gulf to Latin America: The Repercussions of the War in Iran
by Dorian Kantor and Juan Diego Cubillos
Read the analysis in Spanish on the website of El Espectador.
Download the PDF version of this analysis here.
The Constraint Revealed
On March 31, a Russian-flagged tanker carrying roughly 730,000 barrels of crude docked in Cuba — the first fuel delivery to reach the island since the United States imposed a full energy blockade approximately three months earlier. The White House described the authorization as a humanitarian gesture. The episode was something more diagnostic than that: a demonstration that the United States may currently have less capacity to enforce its proclaimed corollary to the Monroe Doctrine than the scope of that proclamation implies.
The historical logic of the Monroe Doctrine rested on a reciprocal arrangement: hemispheric deference in exchange for a security guarantee. That compact is dissolving. As U.S. military commitments in the Persian Gulf deepen, Latin America is increasingly absorbing the costs of Trump’s imperial presidency without retaining the protection the doctrine once implied. That erosion of capacity carries both strategic consequences for the hemisphere and concrete material costs for the region — costs that are already being transmitted through several distinct channels.
The First Channel: Energy
Since the escalation of hostilities with Iran, international oil prices have risen sharply, with some estimates placing them as much as 40 percent above pre-war levels. For energy-importing economies, this is not a routine market fluctuation but a direct disruption of fiscal planning. Many governments in the region construct their budgets around specific assumptions about the price of oil, and when that price significantly exceeds official projections, the gap translates into intensified inflationary pressure.
The Colombian case illustrates the complexity. Although Colombia’s status as a crude exporter might suggest partial insulation, the country remains a net importer of refined petroleum products, and its domestic fuel subsidy regime means that rising international prices generate an escalating fiscal burden. A substantial share of the windfall from crude exports ends up being absorbed by the cost of subsidizing derivative imports. The net result is not relief but additional economic pressure.
Energy cost increases propagate rapidly across the broader economy. Higher transport costs and rising electricity generation expenses accumulate quickly, and within weeks a global shock is reflected in elevated freight tariffs and higher prices for food and other basic goods. The policy options available to governments are constrained on all sides: subsidizing fuel deepens the strain on already fragile fiscal balances, while passing energy price increases through to consumers erodes purchasing power and generates political instability. Tightening monetary policy through higher interest rates can contain some of the inflationary pressure, but tends to suppress growth in the process.
The Second Channel: Global Finance
Geopolitical conflict and elevated uncertainty typically strengthen the U.S. dollar, driven by a flight to safe assets. Simultaneously, inflationary pressures and monetary tightening — particularly by the Federal Reserve — further restrict international liquidity. For Latin American economies carrying dollar-denominated debt, this combination raises borrowing costs at the precise moment when fiscal conditions are deteriorating. A heightened preference for U.S. assets simultaneously reduces investment flows toward emerging markets. The result is a compounding deterioration of fiscal and monetary conditions for governments already facing intensifying domestic pressures.
The Third Channel: Structural Dependence
The energy shock is accelerating the urgency of diversifying supply sources and reducing dependence on imported fossil fuels. For many countries in the region, renewables have ceased to be solely a climate policy objective and are increasingly presenting themselves as an energy security imperative. Immediate solutions, however, do not exist. Latin America continues to depend on imported fuels and petrochemicals, and one of the most sensitive pressure points is fertilizer supply. Disruptions associated with constraints on the Strait of Hormuz affect global input markets, which in turn depresses agricultural output and undermines commodity exports that remain fundamental to the fiscal stability of several countries. Longer-term alternatives — electric vehicles, battery storage systems, distributed energy infrastructure — remain, under current budgetary constraints, options of a different planning horizon.
The Fourth Channel: Illicit Economies and Security
The economic shocks associated with rising energy prices generate second-order effects that are considerably harder to reverse. When opportunities within the formal economy contract, informal and illicit economies tend to expand. Criminal organizations adapt faster than states and operate without the constraints that regulation imposes. They are therefore able to absorb displaced labor, provide income where the formal economy no longer does, and extend territorial control into the spaces the state cannot cover. In the current environment, rising prices and falling incomes are creating an enabling environment for the expansion of organized crime — particularly in countries like Colombia, where these networks already contest parcels of state authority.
This dynamic is compounded by growing uncertainty surrounding the U.S. security commitment. For more than two decades, programs such as Plan Colombia provided sustained backing that helped strengthen state capacities in strategic areas. That framework is today considerably less stable. Budgetary uncertainty, shifting priorities, and competing demands have reduced the predictability of U.S. engagement, particularly as the Trump administration cuts foreign assistance budgets and the agencies that administer them. The result is a widening gap between security challenges on the ground and the resources available to address them.
The Fifth Channel: Migration
Migration is the most visible effect of this compounding chain of pressures, and it follows a well-established sequence. Prices rise faster than wages, employment opportunities contract, and insecurity grows as illicit economies expand. Under those conditions, some households conclude that leaving entails less risk than staying. According to the UN World Food Programme, up to 45 million additional people could fall into acute food insecurity if the conflict extends through the summer — a figure that, if realized, would translate directly into intensified migratory pressure on the region and, ultimately, on the United States itself.
This exposes a structural contradiction at the heart of Trump-era Latin America policy. The most effective approach to reducing migratory pressure runs through sustained investment in economic stability and security in countries of origin. Yet precisely those areas are today being starved of attention and resources by ideological blind spots and the reallocation of strategic focus toward other theaters. The outcome is a self-reinforcing cycle in which the conditions driving migration are aggravated by the policy decisions nominally aimed at containing it.
Strategic Sovereignty and the Emerging Vacuum
The strategic environment is shifting in ways that carry direct implications for Latin American sovereignty. Overextension, on its own, does not create a vacuum — but it does reduce Washington’s capacity to shape outcomes. That space is beginning to be filled by other actors. Russia’s facilitation of energy flows to Cuba constitutes a low-cost demonstration of Moscow’s presence and reach. China continues its more gradual advance through trade, investment, and infrastructure, without requiring open confrontation. Strategic competition in the Western Hemisphere demands consistency and sustained commitment; Washington appears increasingly unable to supply either.
The more immediate risk to regional sovereignty, however, may come from Washington itself. The same Coalition of the Willing logic used to justify unilateral military action in the Persian Gulf rests on the premise that security imperatives can override the limits of multilateral consensus. That logic is equally available as a justificatory framework closer to home. The Trump Corollary already frames certain Latin American states as security threats rather than sovereign partners. Venezuela is the most visible case, but the logic is not confined to a single country or a single theater. A United States that has demonstrated willingness to act outside the norms of international law in one context can transpose that precedent to others. For a region already absorbing the economic costs of a war it did not choose, the prospect of becoming the next application of that doctrine is not remote — it is a structural risk inscribed in the current trajectory of U.S. foreign policy.
The Diminishing Margin
In recent years, Latin America has benefited from a degree of strategic flexibility — the capacity to engage with multiple external partners and extract concessions from their competition. That flexibility, however, depends on major powers maintaining sustained attention toward the region. When that attention recedes, so does the margin for maneuver. Countries in the region find themselves increasingly exposed to accepting terms defined from outside, rather than actively participating in shaping them.
The effects of the U.S. military commitment in the Persian Gulf are already visible in the region: rising debt burdens, inflationary pressure, the expansion of informal economies, the weakening of security partnerships, and accelerating migration flows.
Trump’s imperial overextension is already exposing the fractures in the United States’ capacity to sustain its hemispheric dominance. Latin America is absorbing the economic shocks of a war it did not start, navigating security pressures with increasingly unreliable external support, and operating in a more complex geopolitical environment with a shrinking margin for maneuver. No government in the region had a voice in the decision that produced the current conflict, and none is playing a meaningful role in shaping its course. The costs, nonetheless, are already being distributed across the hemisphere — while the security guarantee that was once the implicit price of hemispheric deference has been quietly withdrawn.
