CROSSROADS: Middle East, Asia, Latin America, Sub-Saharan Africa

Here is a summary of the most important events that unfolded over the last month in the Middle East/North Africa, Asia (ex-China/India/Japan), Latin America, and Sub-Saharan Africa, and which may affect economic, financial, and geopolitical issues in the months ahead.

Middle East & North Africa

The global oil market has been sharply unsettled by the Middle East conflict, though a late-breaking diplomatic move has temporarily eased the most acute supply fears. President Trump’s decision on Tuesday to extend the U.S.-Iran truce has helped avert an immediate return to large-scale hostilities even as tensions remain high. In the lead-up to the extension, fears of renewed fighting sent Brent crude prices surging back toward $100 per barrel, underscoring how sensitive markets remain to any threat to Gulf supplies. While the Strait of Hormuz has not fully reopened, ongoing U.S. and Iranian restrictions on shipping, combined with naval seizures by both sides, continue to impede flows through one of the world’s most critical energy chokepoints. Attacks on infrastructure and the effective closure of the Strait of Hormuz for the last several weeks have driven the largest supply disruption in history, cutting global output by millions of barrels per day this year and slashing flows through the strait from over 20 million bpd pre-conflict to just a fraction of that level. Oil prices have surged toward record levels, at times approaching $150 per barrel, forcing governments and consumers to reduce consumption, while demand is now expected to decline slightly overall—reversing earlier forecasts for growth—with particularly steep drops in sectors like aviation, petrochemicals, and LPG use. Inventories are being rapidly drawn down to offset shortages, though refinery runs and global throughput have also fallen amid constrained feedstock supplies. While the IEA’s base case assumes partial recovery of Middle Eastern exports by mid-year, it warns that prolonged disruption could deepen supply losses, accelerate demand destruction, and strain the global economy. Beyond energy markets, financial stress signals are emerging in the region, with the UAE reportedly requesting a dollar swap line from the Federal Reserve, underscoring that a return to pre‑crisis economic and financial standing will take considerable time and highlighting how the current environment remains fragile and increasingly amplified by future uncertainty.
Yesterday, President Trump announced a three-week extension to the Israel-Lebanon ceasefire. The extension was unveiled after ambassador‑level talks at the White House and was intended to create additional space for negotiations that began with an initial meeting on April 14—the first such direct contact between the two countries in decades. The negotiations, facilitated by Secretary of State Marco Rubio, unfolded as the ceasefire showed signs of strain. According to several news outlets, Israel carried out strikes on Hezbollah sites in southern Lebanon after the group fired rockets into northern Israel, just a day after Trump announced the extension, highlighting the truce’s fragility. Hezbollah was not involved in the U.S.-brokered talks and remains opposed to them. Tensions were heightened by the killing of Lebanese journalist Amal Khalil in an Israeli airstrike while she was reporting in southern Lebanon, intensifying criticism of continued military operations despite the ceasefire. Despite Hezbollah’s objections and ongoing violence, Lebanese President Joseph Aoun has defended the negotiations as essential to protecting Lebanon’s national interests, while France has signaled deeper international involvement, with President Emmanuel Macron offering support to help Lebanon prepare for the talks.
Tensions in the Gaza Strip remain entrenched as ceasefire negotiations stall and violence persists, with Hamas firmly rejecting calls to disarm while Israel continues targeted strikes and security operations. Hamas’s armed wing, led by spokesperson Abu Obeida, has ruled out relinquishing weapons unless Israel fully withdraws from Gaza, framing disarmament demands within the U.S.-backed peace plan as an attempt to prolong the conflict, while insisting Israel has yet to meet initial ceasefire commitments. On the ground, Israeli airstrikes have continued to cause casualties, with more than 750 Palestinians reportedly killed since the October truce, and sporadic clashes have emerged between Hamas fighters and Israeli-backed local militias, underscoring growing fragmentation within the enclave. The broader ceasefire framework, intended to transition governance to non-Hamas actors and advance reconstruction, remains stalled over core disagreements on disarmament and territorial control, leaving Gaza in a volatile limbo where intermittent violence, competing armed groups, and humanitarian strain continue despite the formal pause in large-scale war.
A renewed maritime dispute in the Gulf has triggered a unified regional response as Iraq submitted new maritime coordinates to the United Nations that Kuwait says infringe on its sovereign waters and established territorial features. In response, Gulf states including Saudi Arabia, Qatar, United Arab Emirates, Bahrain, and Oman have publicly backed Kuwait, emphasizing adherence to international law—particularly the UN Convention on the Law of the Sea—and rejecting Baghdad’s claims. Saudi Arabia in particular expressed “categorical rejection” of any encroachment into the jointly managed Saudi-Kuwaiti Divided Zone, warning that Iraq’s submission violates established agreements and UN-demarcated boundaries while calling for dialogue and respect for sovereignty. The dispute revives longstanding tensions dating back to the 1990 invasion of Kuwait and unresolved maritime demarcation issues, including the contested Khor Abdullah waterway, despite a 2012 agreement later invalidated by Iraq’s courts. While Kuwait maintains that the regions in question are not disputed, Iraq argues its claims are based on standard maritime measurement practices, leaving the situation as a test of regional cohesion and international legal frameworks amid broader geopolitical instability.
Efforts by regional and global actors to mediate tensions between Pakistan and Afghanistan have produced only limited and temporary results, underscoring the structural constraints facing third-party diplomacy. Countries such as Qatar, Turkey, and Saudi Arabia have all attempted to broker ceasefires and facilitate dialogue, motivated by concerns over regional stability, trade routes, and counterterrorism spillover, while China has also stepped in to mediate through talks in Urumqi aimed at preventing escalation. Despite these efforts which have included a temporary Eid ceasefire and prior agreements like the 2020 Doha framework, negotiations have repeatedly stalled or collapsed, reflecting deep-rooted disputes such as Afghanistan’s refusal to recognize the Durand Line and Pakistan’s concerns over militant groups like Tehreek-e-Taliban Pakistan operating from Afghan territory. External mediators can facilitate dialogue or short-term de-escalation, but they have been unable to overcome entrenched mistrust, divergent security priorities, and the Taliban’s unwillingness to fundamentally alter its strategic posture.
Market Implications: The U.S.–Iran truce extension has eased the most acute supply fears, but the partial closure of the Strait of Hormuz keeps oil markets in a high‑volatility regime. With analysts suggesting 10 million bpd of supply still offline and inventories being rapidly drawn down, energy markets will remain highly sensitive to any diplomatic setbacks. A prolonged disruption would reinforce upside pressure on crude benchmarks and sustain elevated refining margins, while demand destruction in aviation and petrochemicals may deepen if prices retest recent highs. Persistently high energy prices are also spilling over into agricultural markets by raising fertilizer production and transportation costs, tightening global fertilizer availability and increasing risks to food supplies in import‑dependent regions. Regional political risks remain elevated. The Israel–Lebanon talks introduce a narrow path to de‑escalation, but ceasefire violations and Hezbollah–Israel skirmishes keep a risk premium embedded in Eastern Mediterranean assets. Meanwhile, stalled Gaza negotiations and fragmentation among armed groups prolong uncertainty for reconstruction‑linked sectors. Gulf sovereigns should remain insulated, but Iraq–Kuwait maritime tensions add another layer of geopolitical noise that markets will monitor for spillover into shipping and LNG flows.

Latin America and the Caribbean

Over the last month, the U.S. began to significantly ease sanctions on Venezuela. The Trump administration has implemented a phased approach to normalize relations and stabilize the Venezuelan economy while securing access for American companies. On April 1st, the U.S. Treasury removed Delcy Rodríguez, Venezuela’s acting president, from the Specially Designated Nationals (SDN) list. This allows her to travel to the U.S. for diplomatic purposes and conduct business with American companies without legal penalties. On April 14th, the Treasury Department issued licenses authorizing commercial links with several major state-run financial institutions, including the Central Bank of Venezuela, Banco de Venezuela, Banco Digital de los Trabajadores, and Banco del Tesoro. These institutions can now legally use U.S. dollars and re-enter global financial markets. In March, the Treasury issued a broad authorization for Petróleos de Venezuela S.A. (PDVSA) to directly sell oil to U.S. companies and global markets. This marked a massive shift after years of blocking most dealings with the Venezuelan oil sector. Many of the recent measures, particularly those affecting the banking sector, are authorized via temporary licenses rather than a permanent lifting of sanctions. The U.S. also formally reopened its embassy in Caracas in early April, seven years after its closure. The easing of sanctions is tied to the interim government’s compliance with U.S. demands to open energy and mining industries to foreign investment.
Peru’s presidential election remains unresolved more than a week after voting, as authorities continue to review nearly 1 million contested ballots—an impasse now compounded by the resignation of the head of the country’s election authority following logistical failures that delayed the vote count. With roughly 94% of ballots tallied, Keiko Fujimori leads with about 17%, while Roberto Sánchez and Rafael López Aliaga are locked in a razor‑thin contest for second place, separated by roughly 14,000 votes, with disputed ballots representing around 6% of the total likely to decide who advances to the June 7 runoff. Announcing his departure yesterday, the election official said he hoped stepping down would help “generate more confidence” in the process after problems such as late ballot deliveries, particularly in parts of Lima, fueled fraud allegations, despite international observers finding no evidence of manipulation. The prolonged uncertainty underscores Peru’s deep political dysfunction, as the country braces to install its 10th president in 10 years, with no leader having completed a full term since 2016. Long‑standing structural weaknesses—including fragmented parties, congressional polarization linked to Fujimori’s bloc, widespread informality, and rising crime—continue to undermine governance and erode public trust even as the electoral process limps toward a runoff.
Direct talks between the U.S. and Cuba have resumed under the Trump administration as of last month, marking a significant shift in diplomatic relations amid a worsening humanitarian and energy crisis on the island. A senior U.S. delegation visited Havana this month for the first direct talks in ten years. Secret discussions were also held on April 10th where the U.S. issued a two-week deadline (expiring in late April) for Cuba to release high-profile political prisoners as a sign of good faith. Senator Marco Rubio is reportedly leading the negotiations at President Trump’s request. On the Cuban side, President Miguel Díaz-Canel confirmed that former leader Raúl Castro is also personally involved in guiding the dialogue. The Trump administration is pushing for sweeping political and economic reforms, including the resignation of President Miguel Díaz-Canel, the release of all political prisoners, compensation for confiscated U.S. assets from the 1959 revolution, and addressing concerns over foreign intelligence and military groups (like Russia) operating in Cuba. Cuban officials maintain that the country’s political system and leadership are “not up for negotiation”. However, they have expressed a desire for “sincere dialogue” to ease the crushing oil blockade and economic collapse.
Chile has begun implementing a more aggressive immigration crackdown under President José Antonio Kast, carrying out its first deportation flight as part of a broader effort to tighten border control and remove undocumented migrants. The initial operation expelled 40 individuals to Bolivia, Colombia, and Ecuador—some for criminal offenses such as robbery and drug trafficking, and others for administrative violations—marking what officials describe as the start of a sustained campaign that will expand in scale and frequency. The policy shift includes halting the regularization of over 180,000 migrants initiated under the previous administration and preparing for tens of thousands of additional deportations, with more than 75,000 orders already pending. While deportations have occurred before, the current approach signals a sharper escalation tied to Kast’s platform linking migration to crime, alongside complementary measures such as border fortifications and voluntary departures, particularly among Venezuelan migrants.
Brazil’s 2026 presidential election is shaping up to be an exceptionally tight and polarized contest between incumbent Luiz Inácio Lula da Silva, who at age 80 is seeking an unprecedented fourth term, and Senator Flávio Bolsonaro, running as the heir to his father Jair Bolsonaro’s far‑right movement after the former president was barred from office. Lula continues to lead most first‑round polls by campaigning on stability and social programs, but recent surveys show his advantage evaporating in a likely runoff, where he and Flávio Bolsonaro are statistically tied, turning the race into what analysts describe as a “coin flip.” Other right‑leaning candidates, notably Ronaldo Caiado and Romeu Zema, trail far behind but could play a decisive role by influencing endorsements and voter transfers in the second round, making Brazil’s October election a referendum both on Lula’s return to power and the enduring strength of Bolsonarismo without Jair Bolsonaro on the ballot.
Market Implications: Washington’s phased easing of sanctions on Venezuela opens the door for a gradual normalization of oil exports and banking flows, but the reliance on temporary licenses limits visibility. U.S. companies regaining access to PDVSA barrels could modestly increase medium‑sour supply later this year, though operational constraints and political reversals remain key risks. Venezuelan assets may see incremental repricing as diplomatic channels reopen, but structural uncertainty will cap upside. Political volatility elsewhere continues to weigh on regional sentiment. Peru’s unresolved election and institutional fragility reinforce governance concerns that have historically pressured local assets and contributed to currency underperformance during periods of global risk aversion. Chile’s accelerated deportation campaign signals a tougher domestic security stance but is unlikely to materially shift macro fundamentals. U.S.–Cuba talks, while symbolically significant, remain too early‑stage to alter economic trajectories. The S&P Latin America 40 Index continued to make gains over the last month, notching a nearly 22% return since the beginning of the year.

Asia & Pacific (ex-China/India/Japan)

Japanese Prime Minister Sanae Takaichi announced a $10 billion financial support package on April 15th to help Southeast Asian nations manage surging oil prices and energy supply disruptions. The initiative was unveiled during a virtual meeting of the Asia Zero-Emission Community (AZEC) Plus, which included leaders from Thailand, Vietnam, the Philippines, and Malaysia. The aid will be disbursed as loans and credit lines through state-backed institutions, including the Japan Bank for International Cooperation (JBIC), Nippon Export and Investment Insurance (NEXI), and the Japan International Cooperation Agency (JICA). The funds are intended to help neighbors procure energy resources, equivalent to roughly 1.2 billion barrels of oil (one year of ASEAN imports), and diversify into LNG, biofuels, and renewables. Beyond procurement, the framework supports the construction of oil storage systems and the introduction of Japanese-style oil stockpiling and release systems. Meanwhile in Southeast Asia, the Indonesian government has introduced a multi-pronged package of measures to offset rising jet fuel prices, which have surged roughly 72% since March due to geopolitical tensions in the Middle East. The government will bear the 11% value-added tax (VAT) on domestic economy-class tickets for an initial period of two months. This measure is budgeted at approximately IDR 1.3 trillion ($76 million) per month. The cap for airline fuel surcharges has been increased from 10% to 38% for jet aircraft. Airlines had initially requested a 50% increase, but the government set the 38% “ideal” level to protect consumer purchasing power. Import duties on aircraft spare parts have been reduced to 0% to lower overall airline operational costs. Despite the massive surge in fuel costs, these combined measures aim to limit the final increase in domestic airfares to between 9% and 13%.
The 2025–2026 elections in Myanmar resulted in a decisive consolidation of power by the military regime rather than a competitive democratic outcome. In the parliamentary elections held from December 2025 to January 2026, the military-backed Union Solidarity and Development Party (USDP) won an overwhelming majority of contested seats, securing control of the legislature amid low turnout, widespread violence, and the exclusion or dissolution of major opposition groups like the National League for Democracy. Critics, including the UN and many Western governments, widely described the elections as neither free nor fair, arguing they were designed to legitimize continued military rule following the 2021 coup. Following the parliamentary results, an indirect presidential election on April 3^rd confirmed junta leader Min Aung Hlaing as president with about 73% of the electoral vote, further entrenching military control under a nominally civilian government. Overall, the election did not signal a return to democracy but instead formalized the military’s dominance amid ongoing civil conflict and international criticism.
On April 7^th, Vietnam’s National Assembly unanimously elected Communist Party General Secretary Tô Lâm as the country’s new state president for a five-year term. This move consolidates his control over both the party and the state, marking a significant departure from Vietnam’s traditional “shared leadership” model and aligning its power structure more closely with that of China. All 495 deputies present at the National Assembly session endorsed Lam’s nomination. By holding both the General Secretary and President positions, Lam is considered the most powerful Vietnamese leader in decades. On the same day, the parliament elected Lê Minh Hưng, a former central bank governor, as the country’s new prime minister. Following his swearing-in ceremony in Hanoi, the 69-year-old leader outlined his primary goals for the 2026–2031 term: maintaining peace and stability, implementing a technology-driven development model, and enhancing citizen livelihood. This election follows a period of consolidation. Lam previously held both roles briefly in 2024 following the death of Nguyen Phu Trong.
The Philippines inaugurated a major new coast guard monitoring base on Thitu Island on April 9th. This facility serves as the headquarters for the newly activated Coast Guard District Kalayaan Island Group, the first dedicated command center in the Spratly Islands. Officially described as a “steadfast sentinel of sovereignty,” the base is designed to monitor maritime traffic, support local fishermen, and defend Philippine interests in approximately 68,000 square kilometers of contested waters. The facility is part of a broader upgrade to Thitu Island, which now features internet and cellphone connectivity, stable power and water supply, a newly cemented runway, a wharf, and even a grade school for its approximately 400 civilian residents. The command is led by a commodore-level officer and will be supported by specialized personnel, patrol ships, and aircraft for law enforcement, environmental protection, and search and rescue operations. The opening coincided with a tense encounter where the Philippine Coast Guard accused Chinese forces of firing flares toward its patrol aircraft near the Chinese-occupied Subi Reef, located just 24 kilometers away from the new base. This move is part of Manila’s ongoing efforts to reinforce its operational presence in the West Philippine Sea amidst continued maritime frictions. Smaller outposts are also planned for other Philippine-occupied outcrops in the region.
Market Implications: Japan’s $10 billion energy‑support package provides a stabilizing backstop for ASEAN economies facing surging fuel costs. The program should help soften the inflationary impulse from higher oil prices and reduce near‑term FX pressures for energy‑importing countries. Indonesia’s targeted subsidies and tax relief for airlines may temporarily contain airfare inflation, but they also widen fiscal risks if oil prices remain elevated into the summer. Political developments add a layer of medium‑term uncertainty. Myanmar’s military consolidation removes any near‑term prospect of democratic normalization, limiting investor appetite and sustaining sanctions‑related constraints. Vietnam’s leadership centralization may streamline policy execution, particularly around technology and industrial upgrading, but markets will watch for shifts in regulatory consistency. The Philippines’ expanded presence in the Spratlys increases the likelihood of episodic maritime tensions with China, a factor that could intermittently affect risk sentiment toward the broader region. Overall, the MSCI Emerging Markets Asia Index has surged since the end of March, bringing the year-to-date return to more than 10%.

Sub-Saharan Africa

The African Export-Import Bank (Afreximbank) announced a $10 billion Gulf Crisis Response Programme (GCRP) to shield African and Caribbean (CARICOM) nations from economic shocks caused by the escalating conflict in the Middle East. According to a statement on April 7^th, the board approved the bank to address disruptions that began in February of this year, which have heavily impacted global energy, fertilizer, and food supply chains. It provides short-term foreign exchange (FX) and liquidity to ensure the continued import of fuel, liquefied natural gas (LNG), food, fertilizers, and pharmaceuticals. Afreximbank also offers relief to the tourism and aviation industries, which have faced significant setbacks due to regional instability. Further, the bank seeks to help African energy and mineral exporters scale up production in order to capitalize on the elevated commodity prices and rerouted trade flows. Funds will be used to fast-track critical energy, port, and logistics projects that were delayed by the conflict in order to increase their economic resilience. This initiative follows a pattern of emergency support from the bank, similar to its $4 billion Ukraine Crisis Adjustment Trade Financing Programme and previous COVID-19 interventions.
The Zambian government expects to lose between $100 million and $200 million in revenue over three months due to a temporary suspension of fuel taxes. Starting April 1st, the government zero-rated Value Added Tax (VAT) and suspended excise duties on petrol and diesel imports to protect citizens from soaring energy prices. Finance Minister Situmbeko Musokotwane stated the country will forgo approximately $200 million in taxation. Some earlier reports and estimates from April initially cited a loss of around $100 million. The measure is designed to cushion households and businesses against price spikes caused by geopolitical tensions, specifically disruptions in the Strait of Hormuz linked to conflict involving Iran. This loss of revenue arrives as Zambia works to reduce its budget deficit to 2.1% of GDP while undergoing debt restructuring. Officials have warned that without these interventions, fuel prices would have been significantly higher, further fueling inflation. The Zambian government is currently monitoring global oil price trends to determine if further fiscal adjustments or a revised national budget will be necessary after the three-month period.
The presidential election in Benin, held on April 12th, resulted in a decisive landslide victory for Finance Minister Romuald Wadagni, who won roughly 94% of the vote, defeating his only major opponent Paul Hounkpè, who received about 6% and conceded shortly after the vote. Voter turnout was around 58–63%, and the result was later confirmed by the country’s Constitutional Court. Wadagni, widely seen as the chosen successor to outgoing President Patrice Talon, benefited from strong backing by the ruling coalition and a weakened opposition that struggled to field competitive candidates. The election reinforced the dominance of the incumbent political establishment, though it also drew criticism from observers who argued that restrictions on opposition participation limited the competitiveness of the race. Meanwhile, in Djibouti, longtime incumbent Ismaïl Omar Guelleh scored a decisive victory by being re-elected to a sixth term with approximately 97.8% of the vote. His only opponent, Mohamed Farah Samatar, received roughly 2.2%, with voter turnout around 80%. The election was widely seen as lacking strong competition, as major opposition groups boycotted the vote, and it followed constitutional changes that removed the presidential age limit, allowing Guelleh, who has been in power since 1999, to run again.
Somalia and Turkey officially launched their first joint offshore oil drilling project this month. This historic partnership marks Somalia’s first-ever offshore drilling operation and Turkey’s first deep-sea exploration mission outside its own borders. The Turkish deep-sea drilling ship Çağrı Bey arrived in Somali waters and docked at the port of Mogadishu on April 10th. The exploratory well is named Curad-1, which means “firstborn” in Somali. It is located approximately 370 kilometers (230 miles) off the coast of Mogadishu. The well is planned to reach a depth of 7,500 meters (approx. 4.6 miles), making it one of the deepest offshore wells in the world. Operations are expected to last between 6 and 10 months, depending on weather and sea conditions. The drilling is part of a 2024 hydrocarbon cooperation agreement between the Somali Federal Government and the Turkish Petroleum Corporation (TPAO). TPAO has rights to explore three offshore blocks, each covering about 5,000 square kilometers. The mission is supported by a Turkish naval task force to provide protection against regional security risks. Somalia is estimated to hold at least 30 billion barrels of untapped oil and gas. Proponents see the deal as a critical way to monetize resources despite high risks, while critics have raised concerns about transparency and lopsided revenue-sharing terms. This project solidifies Turkey’s role as one of Somalia’s most influential partners, expanding a relationship that already includes major investments in Mogadishu’s airport and seaport, as well as Turkey’s largest overseas military base.
Market Implications: Afreximbank’s Gulf Crisis Response Programme provides critical liquidity support for fuel, LNG, and food imports, helping cushion the region from Middle East–driven supply shocks. The facility should ease near‑term FX pressures for vulnerable economies and support tourism‑dependent states facing higher energy costs. Elevated commodity prices may benefit select exporters, though logistics bottlenecks and security risks could limit upside. Fiscal pressures remain a central theme. Zambia’s suspension of fuel taxes will soften inflation but widen short‑term revenue gaps at a delicate stage in its debt‑restructuring process. Elections in Benin and Djibouti reinforce political continuity but offer limited catalysts for market re‑rating. Somalia’s first offshore drilling project with Turkey introduces long‑term upside potential, though operational, security, and governance risks remain substantial and will keep investor expectations measured.

Top News This Month

Middle East & North Africa

Latin America and the Caribbean

Asia & Pacific (ex-China/India/Japan)

Sub-Saharan Africa

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