Oil surge masks Argentina's manufacturing collapse as energy boom fails to lift broader economy.

The Strait of Hormuz and the peso at $1,500 to the dollar condense, within a matter of hours, all the tensions defining Argentina in August 2026: an economy with extraordinarily solid external fundamentals and financial markets that refuse to celebrate them.

Iran's announcement of an agreement with Oman to control vessel transit through the Strait of Hormuz — blocking passage to U.S. and Israeli ships — pushed crude above USD 83 per barrel and shook global markets with a force that was felt immediately in Buenos Aires. Argentine sovereign bonds shed an average of 1.5%, with the Global 2030 falling as much as 4%, and JP Morgan's country risk gauge jumped 18 units to 446 basis points, its highest level since mid-June. The S&P Merval closed down 1.8% in its fifth consecutive session in the red, and ADRs in New York reflected the same mood: Tenaris lost 6.8%, Mercado Libre 5.4%, and Globant 2.9%. The irony is no small matter: the very same conflict punishing Argentine assets in financial markets is simultaneously driving up the price of the energy Argentina now exports in record volumes.

That contradiction is the central data point of the day. Vaca Muerta produced 914,900 barrels per day in June, a new all-time record and a 17.1% year-on-year advance, leaving the country just 85,000 barrels shy of the symbolic one-million threshold, which the market projects as reachable before year-end. According to BBVA Research, the energy surplus could climb to USD 13.6 billion in 2026, nearly double the USD 7.9 billion posted in 2025. Economist Ricardo Arriazu, one of President Milei's closest advisors, went further: he estimated a global trade surplus of USD 28 billion for the current year, projecting that the inflow of dollars will be so abundant that, absent Central Bank intervention, the exchange rate would collapse. "We are heading toward a lower real exchange rate," he stated at the Stock Brokers Chamber event, flatly rejecting the calls for devaluation that circulated in recent days among economists across the ideological spectrum, including Roberto Frenkel, a former professor of Milei's.

That currency debate stood at the center of the week. The wholesale dollar closed at $1,499.50, a new nominal record that brushed the $1,500 resistance during the session without breaking through. Intervention was discreet but deliberate: the Treasury sold futures contracts and dollar-linked securities to anchor the exchange rate at that threshold, while BCRA President Santiago Bausili reaffirmed, in his presentation of the second-quarter Monetary Policy Report, that the Treasury operates as "just another market participant" and that its intervention does not imply a reinterpretation of the band scheme. The implicit message is unmistakable: the government does not want the wholesale dollar to break above $1,500 in the short term, at least not before the 2027 elections. Minister Caputo was even more explicit: "The election year is not going to catch us by surprise. We've been working on this for over a year," he said, previewing announcements aimed at shielding exchange-rate stability. The cost of that anchoring is a peso interest rate that climbed during the week — the one-day repo reached 25% annually — compressing credit and hitting the most indebted sectors hardest.

The reserves picture is another example of the tension between the structural and the cyclical. A day earlier, gross reserves had touched USD 50.059 billion, the highest level since September 2019, driven in part by the revaluation of gold. But on Thursday the BCRA paid USD 840 million to the IMF and reserves fell to USD 48.835 billion. The daily snapshot distorts the narrative: so far in 2026, the monetary authority has accumulated USD 13.442 billion through FX market operations. The BCRA also renewed its swap with the People's Bank of China for RMB 130 billion — roughly USD 19 billion — extending the term from three to five years, a key piece of the "firepower" the government is displaying ahead of the electoral cycle. The swap functions as contingent foreign-currency availability and, in its activated USD 5 billion tranche, can be used immediately with no additional restrictions.

YPF, meanwhile, executed a strategic divestment that illustrates the reconfiguration of the energy sector: it sold two conventional blocks in Mendoza — the Chachahuén and Mendoza No Operado clusters — for a total of USD 405 million, aiming to redirect resources toward Vaca Muerta. The buyer of the second lot, San Benito Upstream, is a company controlled by PeCom, the energy arm of the Pérez Companc family. The transaction is not merely financial: it is a transfer of mature assets designed to concentrate capital in unconventional plays, in line with the so-called Plan 4x4. In parallel, mining company Vicuña signed an agreement with San Juan committing an extraordinary contribution of USD 250 million for infrastructure works ahead of the start of production at the country's largest copper project, which carries projected investments of nearly USD 10 billion under the RIGI regime.

The flip side of that sectoral bonanza is manufacturing, where the conflict with the government sharpened this week with unusual intensity. After Caputo called those warning about the industrial slump "morons," UIA president Martín Rappallini responded that defending industry is not incompatible with macroeconomic stability. The tension is not merely rhetorical: according to data from consultancy I+D processed for La Nación, more than 3,000 industrial companies could shut down this year and 105,000 jobs — direct and indirect — could be lost, in a context of 40% idle capacity. Automotive production in July fell 16% year-on-year — its worst reading since the pandemic — and credit to the private sector contracted again in real terms during July, with the credit-card line actually posting a nominal decline of 1.7%. Delinquency is approaching 13% of total private credit stock, the highest level since the 2001 crisis, and a study by the Centro de Estudios de la Ciudad found that people under 25 carry delinquency rates of 38.2%.

What to watch closely in the coming weeks is manifold: the release of July CPI on August 13, which the market expects around 2% with the risk of a mild seasonal acceleration; the evolution of the Middle East conflict and its impact on oil prices and global risk appetite; the congressional treatment of the reform of the BCRA's Charter and of the Fiscal Innocence Law II; and the pressure that dollar purchases for savings — which, according to the BCRA, exceeded USD 2 billion net in June — will exert as electoral proximity activates portfolio dollarization. The structural question remains the same one Caputo avoided answering directly: whether the prosperity of energy, mining, and agribusiness can be transmitted, and on what timeline, to consumption, formal employment, and an industry currently operating with half of its idle capacity.

**Mercado Libre (NASDAQ: MELI)** — The company founded by Marcos Galperin reported quarterly revenue of USD 10.169 billion in the second quarter of 2026, its first ten-digit result in a single period and a 50% year-on-year advance, though the stock fell 6% on Wall Street on compressed operating margins and a delinquency rate in its credit portfolio that exceeded 18.7% for terms longer than 90 days. In Argentina, the firm's third-largest market, revenue grew 20.4%, significantly below the 59% posted in Brazil.

**YPF (NYSE: YPF)** — The state-controlled oil company sold its stakes in the conventional Chachahuén and Mendoza No Operado clusters for a total of USD 405 million to Energía Mendocina, Compañía Andina de Petróleo y Gas, and San Benito Upstream — controlled by PeCom — as part of its strategy of divesting mature assets to finance expansion in Vaca Muerta.

**Aerolíneas Argentinas** — The flag carrier's shareholder meeting approved a 2025 balance sheet showing net profit of $238 billion, which will allow it to pay corporate income tax for the first time in its history — estimated at $6 billion — and close the year without having required Treasury funds, reversing an average operating deficit of USD 400 million per year posted between 2008 and 2023.