Hormuz squeeze becomes Americas’ oil bonanza

October 20, 2026 (MLN): The war in Iran is driving a boom in oil and gas production and exports across the Americas, as buyers rush to secure dependable supply amid growing expectations that disruption in the Middle East could last.

Total crude output in North and South America is on course to rise 10% over the two years ending December 2026, according to Rystad Energy, with Canada and Brazil already setting production records this year.

Venezuela and Suriname are poised for sharp increases after fresh investment from western oil companies, while US exports of crude and refined products such as diesel to Europe, Asia and Oceania have risen 15%.

The Financial Times reported the development in a report titled Iran war tilts balance of global oil power towards Americas.

The report said the war, now in its seventh month, is pushing parts of the Americas, particularly Venezuela and Argentina, towards the US-led sphere of influence that President Donald Trump has termed the Donroe doctrine.

Global markets have lost more than 2bn barrels of crude because of attacks on oil infrastructure and tankers in the Strait of Hormuz.

This has caused a prolonged surge in prices of oil, liquefied natural gas and petroleum products, and is pushing customers and investors to diversify through new supply contracts and more spending in the Americas.

Daniel Yergin, vice-chair of S&P Global, said even Gulf countries will look to diversify by investing in the Americas, and that the disruption is reshaping supply chains and spurring regional energy development.

Schreiner Parker of Rystad Energy said rising output in the western hemisphere has taken medium-term pricing discretion away from the Gulf Cooperation Council, particularly Saudi Arabia, with Venezuela, Argentina, Guyana, the US and Canada all set to play a part.

He added that geography now matters as much as geology, and that the Atlantic margin stands to benefit.

Argentina is among the biggest beneficiaries as a decade of development at Vaca Muerta, one of the world’s largest shale deposits, begins to pay off.

President Javier Milei, a President Trump ally, has actively courted oil investment, and rising output helped lift Argentina’s total exports above $10bn for the first time in September, according to data released on Monday by the national statistics agency. TotalEnergies said this month it would invest $10bn in the country in new offshore developments and an expansion of onshore gas projects, while US shale magnate Harold Hamm unveiled a multibillion-dollar drilling campaign in Vaca Muerta in August.

Chevron, one of the largest foreign investors in Argentina, has lifted output at the El Trapial shale field from 5,000 to 40,000 barrels of oil equivalent per day in three years.

It plans to invest $13.8bn there over the next decade and triple its Argentine production. Ana Simonato, Chevron’s country manager for Argentina, said the Middle East conflict had underlined the importance of strategic diversification.

Last month the US Export-Import Bank also committed $7bn in financing to help Argentina develop energy and critical minerals.

In Venezuela, Washington has boosted the oil sector by capturing former leader Nicolás Maduro in January and inviting international companies to invest $100bn to restore output to its pre-socialist peak of 3mn barrels per day (bpd).

Production has risen 10% this year to about 1.2mn bpd.

Adnoc, Shell, BP and several other companies have signed early-stage deals with Caracas, while Chevron has committed $7bn over five years to more than double its output to about 600,000 bpd.

Canada, the world’s fourth-largest crude supplier, is drawing investors seeking a lower-risk destination in the Americas, with the government of Prime Minister Mark Carney aiming to become an energy superpower.

A survey by ATB Cormark Capital Markets found almost four in five institutional investors are now more likely to back Canadian energy companies because of constraints on Middle East crude and LNG exports.

A Shell-led consortium last month committed more than $20bn to double the capacity of LNG Canada, a British Columbia plant that will export up to 28mn tonnes of LNG a year.

The survey said two other flagship projects, the Ksi Lisims LNG plant and a pipeline carrying up to 1mn bpd of crude from Alberta to the west coast for Asian markets, are now expected to get the go-ahead.

In the US, Wood Mackenzie expects the prolonged conflict to speed up production growth, with shale output reaching about 11.8mn bpd by December 2027, roughly 1mn bpd above pre-war levels.

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