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With the suspension of Chevron's operations, Brazil can meet demand of up to 77 thousand barrels per day, benefiting PRIO, Equinor and Brava Energia
The recent decision by the United States government to halt Chevron’s operations in Venezuela is shaking up the oil market. The move is forcing the American giant to look for alternatives to maintain supplies at its refinery in Pascagoula, Mississippi. And guess who could benefit? Brazil.
Since 2023, Chevron has been operating in Venezuela under special licenses, allowing it to import heavy oil into the United States. This operation resulted in exports of approximately 230 barrels per day. However, with the revocation of these permits, the company now needs to find replacements to maintain its operations.
Venezuelan heavy crude is essential for some U.S. refineries, which rely on this type of feedstock for their operations. With the ban, Chevron and other companies need to look for alternatives in the global market, opening space for new suppliers.
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Opportunity for Brazilian Oil: a strategic window
With Chevron's need to find new sources of heavy oil, Brazil emerges as a highly competitive option.
Brazilian heavy oil production occurs mainly in offshore fields. This type of oil fits the profile desired by Chevron, making Brazil a viable alternative to supply part of the demand left by Venezuela.
Geographic proximity is one of Brazil’s strengths. Export logistics to the US are cheaper than to the Middle East, for example. Brazilian oil faces less risk of tariffs compared to Mexican oil, which makes the country even more attractive to Chevron.
Who are the biggest beneficiaries in Brazil?
Some oil companies Brazilian women can reap the rewards of this change on the global stage.
According to InfoMoney, if Brazil absorbs one-third of Chevron's demand, around 77 barrels per day could be purchased from domestic producers. Companies such as PRIO, Equinor and Brava Energia have heavy oil fields, such as Papa-Terra, Atlanta and Peregrino, which fit the profile desired by Chevron.
Heavy crude currently trades at a discount to Brent, often above $10 per barrel. An increase in demand could narrow that discount, improving producers’ margins. Bradesco BBI estimates that a $1 reduction in that discount could lift Brava’s shares by R$1 and PRIO’s by R$2.
