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With the BRICS summit in Brazil and the trade war between China and the US, Brazilian oil could gain ground as a strategic global supplier. The country already exports 1,9 million barrels/day and has superior quality, low sulfur content and lower CO2 emissions. Could this be the chance to dominate the market and strengthen the economy?
The Brazilian oil industry is facing a crucial moment. With the BRICS summit approaching and the trade dispute between China and the United States heating up, Brazil's exports could gain new momentum. For the president of the Brazilian Institute of Oil and Gas (IBP), Roberto Ardenghy, this scenario opens up space for the country to further consolidate itself as a strategic supplier in the global market.
But what does this mean in practice? Could this move really benefit Brazil? Let's take it one step at a time.
Brazil's role in global energy security
While many of the major oil producers are located in regions marked by conflict and political instability, Brazil has emerged as a reliable alternative. After all, we don't have a war in our backyard, we are far from geopolitical tensions and we also have an open Atlantic Ocean to transport our production without major risks.
- Is Petrobras capable of exploring oil on the Equatorial Margin without causing environmental accidents?
- Espírito Santo is expected to receive R$44,2 billion in oil and gas investments by 2030
- China resells US natural gas to Europe amid energy crisis and trade war
- Brazil expands energy frontiers with unprecedented import of Argentine natural gas via Bolivia
Today, Brazil exports about 1,9 million barrels of oil per day, with China and India as the main buyers. And let's be honest, these countries increasingly need reliable suppliers, which puts Brazil in a difficult position. a privileged position.
With the BRICS summit scheduled for July in Rio de Janeiro, Brazil is expected to further strengthen its trade relations with the other ten members of the bloc. In fact, it is worth remembering that BRICS now has 11 countries and together they produce 42 million barrels of oil per day, almost half of the world's production.
China and India still rely heavily on coal, which, let's face it, pollutes much more than oil. If these countries start to replace some of their coal with Brazilian oil, the impact on decarbonization could be huge.
The trade dispute between China and the US and its impact on Brazilian oil
The trade dispute between China and the US recently gained another chapter: Beijing imposed a 10% tariff on oil imported from the United States. And here comes the question: if China is going to reduce its purchases of oil from the US, from whom will it buy?
Well, someone is going to have to meet this demand, and Brazil has everything it needs to fill this gap. Oil consumption will not stop just because the world's two largest economies are exchanging barbs.
The United States exports large volumes of oil to China, but now, with tariff barriers, this dynamic could change. If Brazil knows seize the opportunity, can significantly expand its share in this market.
In short? Brazil has oil, China needs to buy it, and the US is having trouble selling it. The math adds up.
Brazilian oil and the global energy transition
If there is still room for oil in the energy transition, and everything indicates that there is, Brazilian oil has to be in the game. The reason? Simple: it is of high quality, has a low sulfur content and emits less CO2 when compared to other types of oil.
The IBP emphasizes that, since the world will not be free of oil any time soon, the most logical thing would be to prioritize the one that causes the least environmental impact. And that is where Brazil has an advantage.
COP30, which will take place in Belém in 2025, will be another opportunity to defend the importance of Brazilian oil in the global energy matrix. The IBP, together with specialized consultancies, wants to show that the sector can indeed be sustainable and continue to be relevant in the global economy.
The issue here is not simply to stop exploring for oil, but to understand how to do so in a strategic, efficient and less polluting way.
Exploration of new oil frontiers: a strategic necessity
If Brazil wants to maintain its leading position in the sector, it needs to find new reserves. The pre-salt layer still has potential, but exploration in regions such as the Equatorial Margin and the Pelotas Basin is already on the radar to ensure future production.
Without new discoveries, production could decline in the coming decades, which would weaken the country on the global stage. And nobody wants to lose relevance in this game, right?
The oil industry is reinventing itself, and this is not just lip service. Technologies already exist to reduce the sector’s carbon footprint, such as CO2 capture and storage (CCUS), hydrogen and platform electrification.
According to Eixos, Brazil has a clean energy matrix and can use this to its advantage, combining efficient oil extraction with more sustainable practices.
The future of energy: integration between oil and renewables
The oil and gas sector can, and should, move forward with renewable energy. The idea of installing offshore wind turbines in areas where there are already oil platforms could be a smart and cost-effective solution.
Old platforms, which would otherwise be retired, can be reused to generate wind energy, reducing costs and making the Brazil even more competitive in the energy sector.
And there's more: in countries like Norway, it is already common to electrify active platforms with offshore wind energy, drastically reducing emissions from the oil and gas sector.
