Brazil's Oil Supply Recovery Might Be Hampered By High COVID-19 Infection Levels - IEA

Brazil's Oil Supply Recovery Might Be Hampered by High COVID-19 Infection Levels - IEA

Brazil's oil output recovery might be shadowed this year as the country struggles to contain the outbreak of the COVID-19, while political risks are also rising in light of the 2022 presidential election, the International Energy Agency said on Wednesday

MOSCOW (Pakistan Point News / Sputnik - 14th April, 2021) Brazil's oil output recovery might be shadowed this year as the country struggles to contain the outbreak of the COVID-19, while political risks are also rising in light of the 2022 presidential election, the International Energy Agency said on Wednesday.

"Despite containment measures, significant COVID outbreaks at offshore production facilities have been reported and cases and deaths in Brazil are expected to rise further in the coming weeks. This could cause the recovery to stumble again," the agency said in its monthly Oil Market Report.

For early April, the data suggest that the oil production in Brazil increased month-on-month by 200,000 barrels a day and "if this trend continues, Brazil will remain one of the few producers to make up its 2020 losses by year-end," the agency noted.

However, the IEA still expects Brazil's oil supply growth to further slow down this year to 120,000 barrels a day (kbd) from 180 kbd in 2019 and 150 kbd last year, according to the report.

"Political risk will build ahead of next year's presidential elections, as evidenced by the recent intervention of President Jair Bolsonaro in replacing the CEO of Petrobras. For the moment, international oil companies are still strongly attracted to Brazil's huge and competitive resources and continue to talk up growth plans," the IEA concluded.