Brazil, a major producer, will join OPEC+ beginning next year, the oil cartel announced on Thursday.
Brazil is one of the world’s top ten producers and has been Latin America’s largest oil producer since 2016.
Its crude output reached a record 3.7 million barrels per day in September, representing a nearly 17 percent increase over the same month last year and a 6.1 percent gain over August.
Ministers from the 13-member Organization of the Petroleum Exporting Countries (OPEC) led by Saudi Arabia and its 10 allies led by Russia met to discuss additional output cuts to boost prices.
In a statement, OPEC stated, “The meeting welcomed Alexandre Silveira de Oliveira, Minister of Mines and Energy of the Federative Republic of Brazil, which will join the OPEC+… starting January 2024”.
OPEC+ was formed in late 2016 when Russia and nine other countries joined forces with the Saudi-led OPEC to support plummeting oil prices.
Giovanni Staunovo, an analyst at UBS, stated, “Considering that Brazil is a large oil producer and is driving oil production growth it is important to have them on board, but it seems that they are not cutting production like Mexico, so would conclude with good for OPEC+, less relevant for oil market balances”.
The 23-member OPEC+ is a motley crew of countries: Saudi Arabia and Iran are enemies, civil wars have ravaged South Sudan and Libya, and others such as Venezuela, are stuck in economic crises.
The cartel faced its most serious crisis in 2020, when countries were shut down due to the COVID-19 pandemic, causing oil consumption to plummet.
In April 2020, the group decided to reduce output by 9.7 million barrels a day to improve drooping prices.
It resumed manufacturing in 2021 as the market improved.
OPEC+ countries have declared voluntary price increases in previous meetings, despite falling oil prices.
The alliance has implemented supply cutbacks of almost five barrels per day (bpd) since the end of 2022, with Saudi Arabia leading the way.
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