Brazilian output deteriorates oil market

The market has got a diagnosis: “Lower For Longer”. This year oil lost 20% of its price, the biggest fall since the first half of 1997.

The good will of OPEC and the allies to balance the market by cut-off does not prevent the glut. Markets do not tolerate emptiness. The U.S. shale oil replaces the easy-to-get petroleum from the Gulf countries and their collaborators from the Organization; the threat from the new technology in the oil production industry has been obvious to Saudis, who inspired the current oil crisis in July 2014, from the very beginning. Nevertheless, the world is huge, oil is in great demand all over the globe, industry needs oil every single day, therefore the masters of massive oil fields get the privilege to arrange the business according to their preferences. Meanwhile, the way is not relevant anymore, not these days. The talks and agreements do not permit to conduct the markets.

The non-OPEC oil producers take the opportunity to get petrodollars, while the Cartel is cutting the output and searching the consensus among its members. This year Brazil becomes one of the most active oil supplier. The country famous for its carnivals has soared the oil export to record high 1.47 million barrels per day. In January – February 2017, the volume climbed 65% over the same period in 2016. The company Petrobras settled in Brazil sends its oil to China, Korea, India and United States. Brazilian Petrobras, well known since 1973, is struggling to reduce its debt of around $100 billion, so the best way to cover the financial gap is to trade the specific medium-sweet crude type from Brazil right now. Probably, the higher oil sales allow dragging the national economy out of the recession. Meantime, Brazil jeopardizes the OPEC initiative and shows no signs of incommodity for intervention in the oil market in front of its Middle East partners.

The most interesting for Israel detail of the Brazilian activity on the oil market concerns some potential contacts between Brazilian National Organization of the Petroleum Industry and Israel Export and International Cooperation Institute. A year ago the Institute invited Prof. Renault from the Brazilian Organization to discuss the projects-to-be with Israeli companies. However, the business contacts remain modest, just aliya from Brazil jumps at the end of 2016 owing to the recession in the country ( In “The Middle East and Brazil: Perspectives on the New Global South” edited by Paul Amar the contacts between two states are predominantly described from the point of the “Israel-Palestinian conflict” and a potential role of the Brazil as a mediator in the conflict. Since the beginning of the century, Petrobras has eyed Jordanian Shales, not gas fields in the Israeli Mediterranean. So will the Petrobras oil boom enhance the Brazilian-Israeli cooperation? Do Brazilian have something to offer?