From black gold to black hole. For a stark illustration of how oil price pain is spreading, look no further than the humbled state energy champions of Latin America. The collapse in oil prices during the past 12 months from Mexico to Brazil has sliced into profits, taken chainsaws to budgets and stemmed the flow of taxes paid into government coffers. In some cases, the rout is poised to reverse it. “The 70 per cent drop in prices is a major shock. Oil was contributing in some countries from 20 to 50 per cent government revenues and 50 to 96 per cent of exports,” said Luisa Palacios, head of Latin America at Medley Global Advisors, a risk consultancy owned by the Financial Times. “No wonder we are starting to question the financial viability of some countries and some national oil companies.” Venezuela, flirting with default even though it made a $1.5bn bond payment last week on its $120bn of foreign debt, is the most desperate example. But in Brazil, Petrobras, the world’s most indebted big oil group and subject of a multibillion-dollar corruption probe, has debt costs that have hit 13 per cent from 4 per cent a few years ago. Its predicament has led to talk of a bailout. Investment-grade countries and companies have been swept up by the turn of the commodity super cycle that has also forced western energy groups to cut jobs, shelve projects and adapt to a world of $50 oil or less. Pemex, the world’s eighth-biggest oil producer, lost $30bn last year, prompting the Mexican government to say it would help plug the state-owned company’s $91bn of pension liabilities and potentially even recapitalise it.