Latin America unveiled: Oil, power and influence

Peter Backman - Oil, power and influence

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In the second part of our exclusive series, Peter Bäckman, CSyP, AMBCI, CEO of TEDCAP explores how the Iran-Saudi Arabia alliance could impact Latin America through oil and influence.

The recent alliance between Iran and Saudi Arabia has sparked concerns about its potential impact on security, economics and geopolitical risks in Latin America. Security experts are particularly worried about the possibility of new threats arising from this alliance, as the two countries have a history of supporting opposing sides in regional conflicts such as Syria and Yemen.

If Iran and Saudi Arabia increase political or military support for their respective allies in Latin America, it could exacerbate existing conflicts or create new ones. Moreover, this alliance could also result in an increase in terrorism in the region, as both countries have been accused of supporting extremist groups.

Religious factors

The growing Islamic presence in Latin America could have significant impacts on the social, political and economic dynamics of the region. While it could promote cultural diversity and increase tolerance for different religious beliefs, it could also lead to tensions and conflicts if it is perceived as a threat to the dominant religious and cultural norms of the region. Furthermore, the rise of religious extremism in other parts of the world could spread to Latin America, leading to increased terrorism and security risks.

The importance of oil

Economically, the alliance between Iran and Saudi Arabia could disrupt existing trade relationships and create new economic dependencies, leading to geopolitical risks. Both countries are major oil producers and exporters, so any change in their relationship could have a significant impact on global oil prices.

In recent years, the US has become a significant oil producer, reducing its dependence on Middle Eastern oil. However, Latin America is not so self-reliant, meaning that if the global oil supply chain is disrupted in any way, it could have severe economic consequences for the region.


Moreover, the alliance between Iran and Saudi Arabia could also lead to increased competition for influence in Latin America. Both countries have expressed interest in expanding their economic and political influence beyond the Middle East and Latin America could be a valuable region for them to achieve this goal. If they increase their investment in Latin American countries, they could disrupt existing trade relationships and create new economic dependencies, leading to geopolitical risks.

Iran’s influence in Venezuela has been primarily focused on the energy sector, with Iranian companies investing in Venezuela’s oil industry and helping to develop the country’s refining capacity. Iran has also provided Venezuela with significant military and intelligence support, including the sale of arms and technology.

Monitoring risk

As we closely observe the situation in the Caribbean surrounding Haiti and Cuba, we see the potential for major advancement and also security risks in the region, as both these countries have been mostly snubbed by western powers and encounter deep social, political and economic difficulties that impact the surrounding nations. A major shift in geopolitical alliances could bring the Caribbean nations under the influence of anti-western powers, potentially disrupting the Monroe Doctrine but also providing much needed development and access to the global market.

While still in its burgeoning stages, the alliance between Iran and Saudi Arabia has the potential to create significant security, economic and geopolitical risks. While the full extent of these risks is still unknown, it is clear that any disruption to the existing power dynamic in the region could have significant consequences. As such, policymakers in Latin America and beyond must remain vigilant and take steps to mitigate the potential risks associated with this new alliance.

Read the previous installment of Latin America unveiled here and make sure to keep an eye out for the next piece, coming 15 May!

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