​Latin America has dramatically increased its oil reserves during the last decade, surpassing the Middle East as the region with more years of reserves at the current production levels. These vast resources contrast with the stagnant levels of production in the region. Of the three largest producers Venezuela, Mexico, and Brazil, only the latter is increasing production. Why is this huge potential being wasted? The obstacles are over the surface, politics and policies are to blame. Can this situation change? The political economy of the industry can give us some vital insights. ​