Page 4 - LatAmOil Week 11 2022

COMMENTARY Y
LatAmOil COMMENTAR LatAmOil

(Image: Petrobras)

Brazil’s response to

Russia-Ukraine conflict

South America’s largest economy is under pressure, both as an oil producer and as a fuel consumer

RUSSIA’S invasion of Ukraine on February 24 differences are all the more apparent because
has delivered a jolt to the global economy at large 2022 is an election year.
WHAT: and to world oil markets more specifically. This essay seeks to provide a brief overview of
Brazil has promised the In the immediate aftermath of the outbreak the pressures now at play in Brazil.
US to make more crude of war, crude prices began soaring in response to
oil available on the world concerns that Western sanctions would severely More oil, please
market. restrict the volumes that Russia, one of the With respect to production, Brazil’s government
world’s largest oil producers, was able to export. said earlier this week that it had been asked
WHY: More recently, though, prices have lost momen- directly by the US to make more oil available for
Meanwhile, rising tum because of concerns that the conflict might sale to make up for the Russian barrels that are
domestic fuel prices are cause the global economy to contract, thereby being kept off the global market because of sanc-
contributing to political
tensions. undercutting demand and slowing the recovery tions. (Both the US and the EU have announced
from the coronavirus (COVID-19) pandemic. plans to restrict Russian crude imports.)
WHAT NEXT: Brazil, as South America’s largest economy In a note sent to the AFP news agency on
If crude remains bullish, and largest energy producer and consumer, has March 14, Brazil’s Minister of Mines and Energy
there is likely to be po- not been able to avoid this turmoil. As a major Bento Albuquerque confirmed that he had spo-
litical turnover in Brazil producer, it has come under a certain amount of ken to US Secretary of Energy Jennifer Gran-
this year. pressure to help ease the supply concerns raised holm about this matter.
by Western sanctions on Russia. He also indicated that increasing crude sales
But as a consumer, it is being pushed in was in line with Brazil’s own long-term eco-
several different directions at once – and the nomic strategy.

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