Following a request from U.S. Secretary of Energy Jennifer Granholm, Brazil will increase its oil output and contribute to Western efforts to avoid global fuel shortages, said Mining and Energy Minister Bento Albuquerque, who spoke with Ms. Granholm last week.
“Countries that have oil stocks, like the U.S., Japan, India, and others, are releasing it. But there also has to be an effort to increase production. [Jennifer Granholm] asked me if Brazil could be part of this effort and I said: ‘Sure it can.’ We are already increasing production, while most OECD countries have reduced theirs. We have increased our production in the last three years,” Mr. Albuquerque told newspaper Valor.
The Brazilian government has created a committee to monitor supplies, evaluate the global scenario, and recommend policies to avoid fuel shortages. Brazil has its own interests in avoiding disruptions to the global oil market. State-controlled oil major Petrobras, which holds a de facto monopoly on oil refining, pegs its prices to international rates.
With U.S. sanctions on Russian oil, Brent prices reached a 12-year high. That led Petrobras to announce a massive hike in diesel and gasoline prices, which is set to have ripple effects throughout the entire economy.
Amid talks between Russia and Ukraine as well as new Covid lockdowns in China, the Brent global crude benchmark fell 8 percent to USD 103.68 per barrel — but the effects on the domestic market will not be immediate.
Besides pushing Brazil for greater output, the U.S. aims to re-establish diplomatic relations with the Nicolás Maduro government in Venezuela to import oil, as we explained in our latest issue of the Latin America Weekly newsletter.