A large proportion of Chinese finance in Latin America is packaged with oil-sale contracts commonly referred to as "commodity-backed loans", whereby nations ship hundreds of thousands of barrels of oil to China to help repay their debts.

These commodity-backed loans have been scorned, because it is assumed that China forces Latin Americans to "lock-in" to low prices for oil. With oil prices having gone through the roof, China must be making windfall profits: such is the received wisdom. But a closer look suggests the deals are better for South Americans than most believe.