Brazil and Argentina to Drive Latin American Oil Production Growth Until 2050

Latin America is poised to become a significant engine for global oil production growth outside the OPEC+ alliance, with projections indicating a rise in output from 7.5 to 11.6 million barrels per day by 2050. This expansion is primarily fueled by the anticipated production increases in Brazil and Argentina, positioning the region as the world's second-largest oil exporter.

The forecast comes from the Organization of the Petroleum Exporting Countries (OPEC) in its "World Oil Outlook 2050." The report highlights that Latin America will contribute the most to the supply increase from non-OPEC+ countries. This growth accounts for the vast majority of the projected 5.5 million barrels per day increase in supply from these nations by mid-century.

While Venezuela, a founding OPEC member, is not given specific projections, it is expected to remain a key regional producer with substantial potential for increased output due to its vast proven reserves. However, realizing this potential hinges on attracting significant capital investment to revitalize its oil industry, which currently produces just over one million barrels per day, a fraction of its 2013 capacity.

Brazil's expansion will focus on its ultra-deepwater fields, with new FPSO (Floating Production, Storage, and Offloading) units coming online in fields like Búzios and Mero. Production is expected to rise from 3.7 million barrels per day in 2025 to 4.4 million in 2030, peaking around 5.8 million barrels per day in the 2040s. Argentina, meanwhile, is concentrating its efforts on the Vaca Muerta shale field, aiming to increase production from 1 million barrels per day in 2025 to 1.3 million in 2030, reaching 2.1 million barrels per day by 2050.

This production surge will significantly boost Latin America's crude oil exports, which are projected to grow from 4.5 million barrels per day in 2025 to 7.4 million by 2050, with a peak of 7.7 million barrels per day in 2045. The primary destinations for these exports will be the Asia-Pacific region, absorbing approximately 3.8 million barrels per day by 2050, followed by the United States and Canada, which are expected to import around 2.8 million barrels per day. Concurrently, oil demand within Latin America is also projected to increase, rising from nearly 7 million barrels per day in 2025 to 9.7 million by 2050, driven by demographic growth and an anticipated annual economic expansion of 2.1%. The report also notes potential challenges in the refining sector due to capacity limitations.

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Latin America will be one of the main sources of global oil production growth outside the OPEC+ alliance until 2050, as it will increase its production from 7.5 to 11.6 million barrels per day, driven by Brazil and Argentina, and will consolidate itself as the second largest exporting region in the world.