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Although the ceasefire between the United States and Iran remains in place, the effects of the war are still being felt in the daily lives of millions of people in Latin America and are likely to continue for months to come.
From rising fuel prices to the frequency of public transportation to the cost of popular foods like tortillas, Latin American households say they are feeling the strain of a war they are not involved in.
Analysts predict that even if the conflict in the Middle East ends quickly, the impact on Latin American economies will continue for a long time.
According to the International Monetary Fund (IMF), the world is expected to experience an oil shortage this year, and the longer the war drags on, the bigger the impact will be, potentially pushing the world into recession.
The cost of living is rising again in Argentina, which has struggled to curb soaring inflation, and President Javier Millay’s government blames the conflict in the Middle East in part.
Since the start of the war, fuel prices in Argentina have increased by more than 20%.
Passengers using public transport in Buenos Aires have been dealing with delays since early April as transport authorities reduced bus service due to rising diesel fuel prices.
In recent weeks, long lines and frustrated passengers have become a common sight, especially in downtown areas and during peak hours. Some commuters say their travel times have nearly doubled.
Inflation has been rising steadily for several months after falling from multi-decade highs in 2023, overturning Millais’ predictions months ago that inflation would end “by mid-2026”.
The inflation rate in March was 3.4%. According to the economy minister, fuel prices rose by 9%, domestic airfares by 24% and intercity transport fares by 22% in the same month due to the war.
Hugo Vázquez, an economics graduate of the University of Buenos Aires (UBA) and former Buenos Aires City Comptroller General, said prices could remain high in the coming months.
“The effects of the war have not yet been fully reflected in the Argentine economy, and that is the problem, because there is a feeling that everything happened in March, but the truth is that is not the case,” Vázquez said.
Rising fuel prices are also having an impact on costs in the freight transport sector, which rose 10% month-on-month in March, the highest increase in two years, according to the Transport Cost Index (ICT) of the Argentine Federation of Freight Transport Entities (FADEEAC).
Basque predicted that even if the civil war were to end quickly, the impact of the war on Argentina’s economy “will remain at least until the middle of this year and probably for several months afterward.”
For countries that are “net importers” of fuel, such as Costa Rica and much of Central America, the impact of the war is “clearly negative” as “fuel, transport and food prices rise, increasing pressure on household budgets,” said Cecilia Godoy, Latin America and the Caribbean analyst at the Economist Intelligence Unit (EIU).
Gasoline and jet fuel prices soar during war with Iran
At gas stations in Costa Rica, customers often ask two questions. “Has it gone up yet?” “It’s on today, isn’t it up yet?”
Kevin Calvo, a nursing assistant in Cartago, said his biggest worry is increasing daily expenses. “I’m very concerned because when fuel prices go up, everything goes up in price. In my case, I use public transport to get around, so I’m worried about the price of the pass,” he said.
Petrochemical raw materials, which are the basis for plastic production around the world and the packaging of food, hygiene, health and cleaning products, will also be affected, according to Costa Rica’s Chamber of Plastics Industry (Aciplast).
Costa Rica’s plastics industry employs approximately 14,000 people, exports more than $528 million annually, and relies on imports of raw materials.
“We are faced with a situation of high uncertainty, as well as constant (cost) increases in the coming days. As an industry, we have worked hard to cope with these increases, but it is important to understand that this is a global phenomenon and the rates are high,” said Rosa Gutierrez, President of Aciplast.
Mexico’s inflation is “under control” despite an “excessive” rise in fuel prices, President Claudia Sheinbaum recently claimed, according to the IMF, acknowledging that the index is rising compared to 3.7% in 2025.
Producers of tortillas, Mexico’s traditional staple, recently warned that they would have to raise prices due to rising costs caused by the war. Mexico’s president said the government would do everything possible to prevent it.
Mexico imports 75% of its liquefied gas and 50% of its gasoline from the United States, a complex dependency that threatens to pass on price increases to consumers.
To alleviate that, the Sheinbaum government is subsidizing the prices of both fuels, but this measure could affect other areas of Mexicans’ lives.
“The government is trying to give subsidies, but that probably means allocating resources from other programs,” said Moritz Cruz, a professor and researcher at the Institute of Economics at the National Autonomous University of Mexico (UNAM) and a PhD in economics.
“In reality, either households will absorb the increase directly through higher prices, or the costs will be passed on to the public finances through wider deficits and spending cuts in other sectors,” Godoy said.
In response to these difficulties, the Mexican government began considering hydraulic fracturing, but the proposal drew opposition from environmental groups.
Scheinbaum said he will work with a panel of experts to evaluate different technologies and their environmental impact, but will not do anything that would negatively impact local communities.
Fuel costs have been a frequent subject of protests in the oil-producing nation, with citizens already feeling the impact of record prices.
The most popular gasoline brands now cost more than $3 a liter, an unprecedented figure despite state subsidies. Analysts predict prices will continue to rise, even with the introduction of a price tier system to curb monthly price hikes.
Washington Ibadango, a taxi driver from Quito, stopped at a famous gas station in the capital to refuel before resuming his shift. “The prices are too high. Too high. Money is not enough anymore,” he said.
He has already noticed fewer people taking taxis.
A concern for many Ecuadorians is how much prices will rise.
“Everything is soaring and there is already speculation. The prices of essential goods are going up,” said Miguel Mejia, an Uber driver who refuels at the same station.
Some experts say the conflict is putting further pressure on Ecuador’s public spending, which absorbs some of the price of gasoline.
The Ecuadorian Heavy Transport Federation, which represents Ecuador’s small and medium-sized transport companies, warned a few days ago that the sector could be “shut down” if the government does not take action on increasing diesel prices. Subsidies for diesel price increases were abolished in 2025 by President Daniel Novoa.
According to the United Nations World Food Program (WFP), Haiti has faced severe food insecurity for many years, with more than half of the population facing difficulty meeting basic food needs.
The agency said the food crisis was caused by armed violence, political instability and economic crisis, and rising fuel prices were jeopardizing the country’s modest progress in tackling the problem.
Vulnerable families are now at greater risk. “Rising fuel prices and the associated rise in food costs risk reversing these gains, pushing vulnerable families further into crisis and further destabilizing the situation,” said WFP Haiti Director Wanja Kaaria.
Approximately 5.8 million Haitians face critical levels of food insecurity or higher. Of these, more than 1.8 million people will experience emergency levels of food insecurity between March and June 2026, meaning they will not be able to meet even basic food needs.
The government has announced austerity measures to rein in public spending and ensure the continuity of essential services amid the risk of oil supply disruptions.
It placed restrictions on the movement of civil servants, reduced the allocation of fuel costs for public institutions, and prohibited the purchase of new official vehicles.
Godoy explained that energy-exporting countries such as Argentina and Mexico could benefit from higher revenues from oil and gas exports, increasing their foreign exchange earnings. However, consumers will continue to face higher prices as these countries rely on imported refined fuels such as gasoline and diesel.
In that scenario, countries experiencing rising inflation rates may not quickly return to pre-conflict levels, putting further pressure on Latin American household incomes, perhaps for several months, experts say.
In the most vulnerable economies, these pressures will also affect growth, Godoy said. “This will likely lead to lower job creation and slower real wage growth, with economic effects that will linger long after the initial shock subsides.”
