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Wed 30 Oct 2019 04:04 PM

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Saudi Arabia invites Brazil to join OPEC oil group

Brazil President Jair Bolsonaro says invitation received after holding meetings with senior Saudi officials

Saudi Arabia invites Brazil to join OPEC oil group
Brazil President Jair Bolsonaro.

Saudi Arabia informally invited Brazil to join OPEC, according to President Jair Bolsonaro, a sign of both the Latin American nation’s growing importance as an oil producer and the challenge it poses to the producer group’s influence on crude markets.

Bolsonaro received the invitation on Wednesday after holding meetings this week with senior Saudi officials including Crown Prince Mohammed Bin Salman, the Brazilian president said on the sidelines of the Future Investment Initiative conference in Riyadh.

“It is the first step for maybe putting in place this policy in Brazil,” Bolsonaro said, adding that he would need to consult with Brazil’s economic team and energy ministry before agreeing to join. He said in a panel discussion at the conference that he was eager for Brazil to accept the invitation.

If it joined, Brazil could become the third-biggest producer in the Organisation of the Petroleum Exporting Countries after Saudi Arabia and Iraq. Brazil’s burgeoning production is complicating OPEC’s effort to prop up crude prices in the face of booming supply from US shale fields and weakening global demand.

Brazil’s oil reserves are bigger than those of several OPEC members, Bolsonaro said. Brazil and OPEC could form “a great partnership” helping each other to stabilize global fossil fuel prices.

Brazil produced 2.71 million barrels a day 2018, according to the International Energy Agency, which forecasts the country’s average output to reach 2.9 million this year and 3.22 million in 2020. Brazilian production in August surged by 220,000 barrels a day to a record 3.1 million, the IEA said in its most recent report.

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