BLOOMBERG/SIMON DAWSONby Kudakwashe Muzoriwa
President Jair Bolsonaro said that Saudi Arabia has informally invited Brazil to join Organisation of the Petroleum Exporting Countries (OPEC), a sign of both the Latin American nation’s growing importance as an oil producer and the challenge it poses to the producer group’s influence on crude markets, reported Bloomberg.
“It is the first step for maybe putting in place this policy in Brazil,” said Bolsonaro. The Brazilian president added that he would need to consult with the country’s economic team and energy ministry before agreeing to join.
If Brazil joins the oil-producing group, the Latin America country could become the third-biggest producer in OPEC after Saudi Arabia and Iraq. Brazil’s burgeoning production is complicating OPEC’s effort to prop up crude prices in the face of booming supply from US shale fields and weakening global demand.
Brazil’s oil reserves are bigger than those of several OPEC members, Bolsonaro said. Brazil and OPEC could form a great partnership helping each other to stabilise global fossil fuel prices.
According to the International Energy Agency (IEA), Brazil produced 2.71 million barrels a day in 2018. The agency expects the country’s average output to reach 2.9 million this year and 3.22 million in 2020. Brazilian production in August 2019 surged by 220,000 barrels a day to a record 3.1 million, said IEA.
Brazil is a bigger producer than the several others that have joined OPEC or left it in recent years. Ecuador plans to exit in 2020. Qatar quit this year. Equatorial Guinea joined in 2017 and Congo Republic became a member last year.