European Energy Investment Shifts Toward Latin America as Geopolitical Risks Reshape Global Strategy

Latin America is poised to play a larger role in the global energy industry as oil and gas companies redirect investment toward regions offering greater geopolitical stability and long-term growth potential.

Speaking before Italy’s parliamentary committee on productive activities, Eni Chief Executive Claudio Descalzi said the prolonged disruption of shipping through the Strait of Hormuz has fundamentally altered how energy companies assess investment risk, prompting the industry to look increasingly toward Latin America and Southeast Asia for new opportunities.

The comments reflect a broader transformation underway in global energy markets, where geopolitical uncertainty is becoming as important as resource availability when companies decide where to allocate billions of euros in capital.

Latin America gains strategic importance

For decades, the Middle East has remained the cornerstone of global oil and gas investment. However, ongoing regional tensions and supply-chain vulnerabilities are encouraging international energy companies to diversify their portfolios.

According to Descalzi, even if political stability eventually returns to the region, investors are likely to assign a permanently higher level of risk to Middle Eastern projects than in the past. As a result, emerging producing regions—including Latin America—are becoming increasingly attractive destinations for exploration, production and natural gas development.

Countries such as Brazil, Argentina, Guyana, Suriname and Mexico have expanded their importance in global energy markets thanks to major offshore discoveries, unconventional resources and growing LNG infrastructure.

European companies deepen their regional footprint

The shift aligns with strategies already being pursued by several European energy groups.

Eni has expanded its presence across Latin America through projects in countries including Mexico and Venezuela, while other European companies such as Repsol, TotalEnergies, Shell and BP continue investing across the region’s upstream, LNG and renewable energy sectors.

The Italian company has also demonstrated its strategy of creating regional partnerships through large-scale joint ventures, such as its recent gas alliance with Malaysia’s Petronas in Southeast Asia, allowing it to accelerate investment while sharing costs and operational expertise.

Energy security drives investment decisions

Beyond commercial opportunities, energy security has become a defining factor in investment planning.

The prolonged instability affecting maritime routes through the Strait of Hormuz has exposed the vulnerability of global supply chains, encouraging both governments and private companies to diversify production sources and reduce dependence on a limited number of exporting regions.

For Europe, strengthening energy partnerships with Latin America could contribute to more resilient supply chains while supporting diversification away from politically sensitive markets.

A new chapter for Europe–Latin America energy cooperation

The changing investment landscape offers Latin America an opportunity to attract fresh capital, technology and expertise from European energy companies seeking stable operating environments.

As demand for natural gas, LNG and lower-carbon energy solutions continues to grow, the region is increasingly positioned as a strategic partner in Europe’s long-term energy security strategy.

For investors, Descalzi’s remarks reinforce a broader trend: geopolitical risk is becoming one of the most influential factors shaping global capital flows, with Latin America emerging as one of the principal beneficiaries of this realignment.