Brazil Unable to Add Oil to The Market Any Faster

Brazil aims to progressively increase its oil and gas output by 3 million barrels per day. However, it won’t be able to do it quickly enough to compensate for a Russian oil embargo, according to Rodolfo Saboia, the country’s top oil regulator.

The South American country, which is one of the largest and fastest-growing non-OPEC oil producers, is set to pump much more oil in the next two years when importers are looking for supplies to replace Russian petroleum, which has been blacklisted due to its invasion of Ukraine. The global demand for crude oil is around 100 million barrels per day. Since Russia invaded Ukraine, many countries have imposed sanctions on its supply, potentially driving up oil prices even further. Russia delivers roughly 7-8 million barrels of crude oil and products every day, calling the program a “special operation.”

Brazil Effort for Speedier Hikes

According to Brazil’s energy ministry, US Energy Secretary Jennifer Granholm phoned her Brazilian colleague last month to request speedier hikes. The US also contacted manufacturers in the United States, Venezuela, and the Middle East. According to him, putting new projects into production can take up to ten years because of Brazil’s geology and supply chain restrictions.

“Production will expand,” Saboia said. However, he added that they can’t do much to speed it up.

“The industry is capable of delivering a lot.”

Petrobras (PETR3), a state-owned oil company, aims to build 15 major offshore production platforms by 2026, according to production chief Joo Henrique Rittershaussen. The 15 will boost total crude capacity by 2.425 million barrels per day.

According to him, another five should begin operations next year. They will have a combined capacity of 630,000 barrels per day of oil. However, the outcome is not immediate. “In a platform like this, it takes approximately a year to achieve maximum capacity,” Rittershaussen remarked.

Interested in Forex Trading? Read WiBestBroker’s comprehensive review on Super1Investments.