Major producer Brazil will join OPEC+ starting next year, the oil cartel announced Thursday.
Brazil is among the top 10 producers in the world and has been Latin America’s largest oil producer since 2016.
Crude oil production hit a record 3.7 million barrels per day in September, up nearly 17 percent from the same month last year and up 6.1 percent from August, according to pricing agency Argus Media.
Ministers from the 13-member Organization of the Petroleum Exporting Countries (OPEC), led by Saudi Arabia, and its 10 partners led by Russia met to discuss further production cuts to boost prices.
“The meeting welcomed Alexandre Silveira de Oliveira, Minister of Mines and Energy of the Federative Republic of Brazil, which will join OPEC+ from January 2024,” said an OPEC press release.
OPEC+ was launched in late 2016 when Russia and nine other countries joined forces with Saudi-led OPEC to support falling prices.
“Given that Brazil is a major oil producer and is driving growth in oil production, it is important to have them on board, but it seems that they are not cutting production like Mexico, so I would conclude: good for OPEC+, less relevant for the oil market balances,” said UBS analyst Giovanni Staunovo.
The 23-member OPEC+ is a diverse group of countries: Saudi Arabia and Iran are bitter rivals, South Sudan and Libya have been rocked by civil wars, and others like Venezuela are mired in economic crises.
The cartel experienced its biggest crisis in 2020 when countries imposed lockdowns due to the Covid pandemic, leading to a collapse in oil demand.
The group agreed in April 2020 to cut production by 9.7 million barrels per day to boost falling prices.
In 2021, the company began increasing production again as the market improved.
At recent meetings amid falling prices, OPEC+ members announced voluntary cuts to boost prices.
Since late 2022, the alliance has implemented supply cuts of about five million barrels per day (bpd), with Saudi Arabia leading the way.
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