Latin America is on the brink of a new era in oil politics. Over the past century, resource nationalism—when governments assert control over their nation’s natural resources—has ebbed and flowed, often in line with movements in global oil prices. In the 1990s, historically low oil prices created room for privatization in many of Latin America’s oil industries. After that, when oil prices rose again, the pendulum swung back toward state control.
But as global oil prices collapsed over the last two years, regional governments have started to lose their leverage in the energy industry. To attract international investors, they must offer increasingly favorable terms, which means ceding more of their own control. Meanwhile, governments that have banked on using the profits from high prices of oil and other commodities to redistribute wealth and gain popularity are at a loss. Without this revenue, these governments have delivered fewer improvements in living conditions and less financial security. As oil prices plunge, citizens appear primed for a change. Many of the region’s incumbent politicians – several of whom are leftist leaders that favor more state control over the oil industry, such as Venezuelan President Nicolas Maduro and Ecuadorean President Rafael Correa —are thus bearing the brunt of the economic slump.