Page 4 - LatAmOil Week 04 2020

LatAmOil COMMENTARY LatAmOil
Brazil’s Economy Minister Paulo Guedes (L) and President Jair Bolsonaro (R) / (Photo: Poder360)
Moving towards a consensus
Brazil’s government appears to be moving in the direction of deciding against OPEC membership
WHAT:
Brasilia and Riyadh
are set to discuss co-operation with OPEC in July.
WHY:
The talks are not likely to end with Brazil seeking membership in the cartel.
WHAT NEXT:
The government may look into working with the OPEC-plus group, but it will continue to see the cartel as a possible brake on its ambitions.
LAST autumn, Brazilian President Jair Bolson- aro reported that Saudi Arabia had invited his country to join OPEC, a group of states that accounts for more than 40% of global crude oil production. Since then, speculation has been rife about how Brazil’s government might respond to the invitation.
So far, there has not been a unified response. Instead, some Brazilian officials have spoken out in favour of OPEC membership, while others have advised against it. Others have vacillated or taken more nuanced positions.
Even so, the government seems to be moving towards a consensus against joining the group.
The president
Bolsonaro’s initial response to the Saudi initia- tive appears to have been positive.
When the president revealed Riyadh’s offer in late October, he described himself as eager to accept it. “Personally, I would really like to see Brazil become a member of OPEC,” he
remarked.
“I think the potential is there. We have vast oil
reserves,” he added. Brazil could help the cartel in its attempt to stabilise world oil prices, he said. But Bolsonaro has stopped short of embrac- ing the idea. In October, he stressed that he would take time to discuss the matter with his own economic advisors and with representa- tives of the Energy Ministry. Brasilia will make no formal requests to join OPEC until it accom-
plishes these tasks, the president said.
The advisor
Since his initial statements, Bolsonaro has not had much to say about Riyadh’s informal invitation.
But one member of his cabinet, Economy Minister Paolo Guedes, has made his opposi-
tion to the idea clear. Shortly after the president
spoke, the minister indicated that OPEC mem- bership was not in line with his own preferences
for free-market operations. 
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w w w. N E W S B A S E . c o m Week 04 30•January•2020