Mar 10, 2022 - World
Axios Explains: Ukraine

How Russia sanctions threaten Latin America

Illustration: Megan Robinson/Axios

Latin America is starting to feel the heat — and some favorable changes — from economic sanctions against Russia.

The big picture: The region has increasingly embraced Russia (and China) in past years for infrastructure investments and access to COVID-19 vaccines.

  • Countries also sanctioned by the U.S. and Europe, such as Cuba, Nicaragua and Venezuela, have allied with Russia for access to banking and loans, particularly in the last decade.
  • Sanctions against Russian banks could leave them hanging.

Details: Latin America is already seeing higher oil and gas prices, which is particularly tough on the mostly Central American countries that don’t produce their own.

  • Higher inflation and interest rate spikes could hurt consumers.
  • The COVID vaccination campaign could slow down if Russia's Sputnik shot becomes inaccessible.
  • Countries such as Argentina that now have trade deals with Russia and had products like citrus and peanuts ready to go are now waiting indefinitely.

But, but, but: There could be some benefits.

  • Higher prices for agricultural products and commodities like metals could be beneficial to some in the region who export those goods.
  • Trade disruptions might help Brazil expand its meat distribution globally, according to Reuters.

What to watch: In a stunning reversal, the U.S. may be opening talks to resume oil trade with Venezuela to help with its own soaring gas prices.

  • This could be a major boon for Venezuela's Nicolás Maduro. About 6 million people have been forced to flee Venezuela due to hunger and instability.
  • Maduro released two American hostages on Tuesday after talks with U.S. officials, which have sparked backlash in Washington.

Subscribe to Axios Latino and get more news that matters about Latinos and Latin America, delivered right to your inbox on Tuesdays and Thursdays.

Go deeper