Brazil Joins OPEC+

Brazil has joined OPEC+ two years after the group extended an invitation, but its membership will not be binding with regard to production cuts, the country’s energy minister said.

At the announcement of the Brazilian government’s decision to join the group, Mines and Energy Minister Alexandre Silveira described OPEC as “a forum for discussing strategies among oil-producing countries. We should not be ashamed of being oil producers. Brazil needs to grow, develop and create income and jobs,” the AP reported.

Brazil is already one of the biggest oil producers in the world but it has ambitions to climb in the ranks to the number-four spot from number seven, with a production target of 5.4 million barrels daily for 2030.

Brazil has also been a focal point for non-OPEC production forecasts, regularly named alongside the United States, Canada, and Guyana as a hotspot for non-cartel production growth. Now, this will change even though the new OPEC+ member is under no obligation to comply with the OPEC+ production cuts.

OPEC’s production, meanwhile, has been declining. The group booked dips for both December and January, with the January rate down by 50,000 bpd from December’s daily average of 26.53 million barrels, according to a Reuters survey. Supply from Iran and Nigeria dropped by 60,000 bpd each, the most among OPEC producers, according to the survey.

The oil producer group was scheduled to start relaxing these production cuts starting in April but there have been reports that the rollback of the output caps could be delayed once again, in line with OPEC’s prioritization of actual market conditions rather than an agenda set in stone. With oil prices wobbly amid U.S.-Russia negotiations that could lead to the lifting of U.S. sanctions, OPEC will likely not be in any rush to stick to its plans for boosting production, seeing as these plans are very flexible to serve the purposes of the group.