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OPEC’s door is open should Brazil wish the join the oil exporting group, OPEC’s Secretary General HE Haitham al-Ghais said at this week’s Argus European Crude Conference.
“Today, Brazil has become one of the biggest exporters and they’ve stopped buying up crude. So the door is open,” al-Ghais said.
For OPEC, it makes sense to bring Brazil into the fold, with its oil and gas production hitting record highs in July of 4.48 million boe/d. Oil output was up 18.6% year over year according to ANP data, reaching 3.51 million bpd. To hear Wood Mackenzie tell it, Brazil’s private oil companies are expected to boost production by 75% by 2030. State-run Petrobras is expected to grow production by 81% within that same timeframe, and Petrobras said it is willing to spend $78B from 2022-2026 to boost its production.
Brazil’s quick rise in the oil industry to become a significant exporter makes it not just a tantalizing morsel for OPEC, but its lack of membership could represent a threat to the group, with major producers offsetting some of OPEC’s power to keep the oil markets in balance.
There have been few benefits bandied about, however, for Brazil in joining OPEC.
In early January 2020, Brazil’s energy minister Bento Albuquerque declined to join OPEC. “The idea is just to increase our production and to participate more in the international oil and gas market,” he said at the time. “But this is not a plan for Brazil to join OPEC or any other association or group of oil and gas producers. We don’t want restrictions, we want to increase our production.”
The only benefit would be that Brazil joining OPEC would add strength to the group and make it easier to control the market—and Brazil would then be part of that strengthened group.
By Julianne Geiger for Oilprice.com
Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.