Latin America Advisor
Energy Advisor
A Publication of The Dialogue
Can Latin America’s Oil & Gas Fill the Void Left By Russia?
With some countries refusing to buy Russian oil and gas as a result of its invasion of Ukraine, oil producing nations in Latin America could potentially help fill the oil supply void that’s been created, according to energy publication Oilprice.com. To what extent can oil and gas producers in the region help replace Russian oil and gas imports lost to sanctions? Are Latin American oil producers able to do so now, or will it take time for them to ramp up production? Aside from the United States, what other countries are looking to the region to make up for banned Russian oil? How might the possibility of leftist leaders coming to power in Colombia and Brazil this year change policies in the oil and gas sectors?
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Tara Hariharan, managing director of global macro research at NWI Management LP: “Latin America currently produces about 8 percent of global oil supply, versus Russia at 12 percent, and a host of political and structural factors limit the region’s ability to increase output to substantially replace Russian oil. Latin America’s top producer, Brazil, is endowed with large offshore deep water deposits, but ramping up production there would be an expensive, protracted process. Mexico is already the United States’ second-largest source of crude oil imports, but its production is hamstrung by President Andrés Manuel López Obrador’s aim to reverse 2013 energy reforms and cap production—not to mention state oil company Pemex’s financial struggles. Venezuela boasts the world’s largest oil reserves, but U.S. sanctions have shrunk its production by four-fifths. The United States is thinking about easing Venezuelan sanctions, but output increases would require significant infrastructure investment…”
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About the Energy Advisor
A sister publication of the Inter-American Dialogue’s daily Latin America Advisor, the weekly Energy Advisor captures fresh analysis from business leaders and government officials on the most important developments in oil and gas, biofuels, the power sector, renewables, new technologies, and the policy debates shaping the future of energy in the Western Hemisphere and beyond. To subscribe or for more information, contact Erik Brand, publisher of the Advisor, at ebrand@thedialogue.org.
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