Organization predicts growth in Brazilian GDP, but signals uncertainty about oil production in Brazil with rising costs and inflation on the horizon.
OPEC (Organization of the Petroleum Exporting Countries) released an optimistic report on Brazil's economic growth, but also brought important warnings about the oil production in Brazil. According to the document, published this Monday (14), the country should maintain a fundamental role in the global fuel supply scenario, however, challenges such as inflation and the increase in offshore production costs may impact the performance in the sector.
Even with reduced expectations for the supply of liquid fuels, OPEC sees Brazil as one of the main drivers of global production, behind only the United States, Canada and China. This keeps Brazil in the spotlight on the global energy scene, even though it faces obstacles.
Brazilian GDP projection on the rise
In the economic field, OPEC adjusted its forecasts for the Brazil's GDP, raising the growth projection for 2024 from 2,2% to 2,5%. According to the report, the “continued strength of the Brazilian domestic economy” and solid consumer demand are some of the main drivers of this optimistic outlook. However, the organization points out that volatility in the industrial sector and inflationary pressures could slow this growth.
- Pre-salt: oil and natural gas production reaches historic record in Brazil
- Governor Fátima Bezerra drives advances in Brava Energia's investments in Rio Grande do Norte.
- Petrobras starts production on the Duque de Caxias platform in the Mero field and boosts capacity in the pre-salt layer
- Petrobras begins drilling its 'crown jewel' in quest to reach 1 MILLION barrels of oil per day
Despite the challenges in oil production in Brazil, such as inflation and uncertainties about monetary policy, OPEC maintained its GDP projection at 1,5% for 2025, without changes in relation to the previous report.
Impacts on oil production in Brazil
About oil production in Brazil, OPEC has lowered its expectations. The country, which had reported lower-than-expected production in recent months, now projects an increase of 60 barrels per day (bpd) in 2023, resulting in an average of 4,2 million bpd. This revision is the result of technical and operational challenges, in addition to the increase in offshore production costs.
For 2024, the cartel expects new oil fields, such as Búzios, Tupi and Itapu, to contribute to an increase in production, but warns that “technical and operational problems could delay the production schedule of the platforms”. OPEC projects an increase of 200 bpd in 2025, taking Brazilian production to 4,4 million bpd, a cut from the 4,5 million previously estimated.
Global oil demand falling
In addition to the issues involving the oil production in Brazil, OPEC also revised global demand for the commodity. The forecast growth for world oil demand was reduced by 106 bpd for this year, totaling 1,9 million bpd. The same downward trend is projected for 2025, with a reduction of 102 bpd, reaching 1,6 million bpd.
Within the OECD (Organization for Economic Cooperation and Development), demand is expected to continue to rise, while outside the group, the expectation is for a more modest increase. It is worth remembering that Brazil is not part of the OECD.
Given this scenario, how can Brazil balance economic growth with the challenges of oil production? Leave your opinion in the comments!