The world could face an energy crisis we haven’t seen. While some oil and gas producers may get super-profits, the economic consequences — Inflation and severe trade disruptions — outweighing any «The benefits of»

Claire Carson, Reporter for Latin America Reports

Source: Source: atinamericareports.com

The strait, the most important shipping artery connecting the Persian Gulf and the Gulf of Oman, almost rose after joint US and Israeli strikes on Iran late last month.

As one of the most critical pathways for global energy markets, nearly 20% of global oil supplies and 20% of global liquefied natural gas volume pass through the strait.

As oil prices continue to rise rapidly and the end of the war is not visible, some countries are feverishly looking for new sources outside the Persian Gulf, including countries in the Caspian region, Scandinavia, North Africa and even Latin America.

And while some Latin American oil-producing countries, such as Brazil, could benefit from increased exports, other non-oil-rich countries could face difficulties competing for energy in an increasingly expensive market.

Brazil and Guyana could win the most in the oil sector

Brazil, the region's largest oil producer with a volume of about 4 million barrels per day, is already exporting more than 3 million barrels per day and has limited short-term capacity to build up. However, according to the national energy development plan, production could grow to 4.4 million barrels per day or more in the coming years.

As many countries, especially in Asia, look for opportunities to fill supply gaps, Brazil could benefit from oil exports.

Christiano Pinto da Costa, Shell Brasil president, calls US-Israel-Iran conflict «A huge opportunity» For Brazil to attract investment, citing the country's geopolitical stability and reliability as a producer.

Shares of the country's state oil company Petrobras rose sharply on Monday after the strikes.

По словам Мэтта Смита, ведущего нефтяного аналитика по Америке в компании Kpler, занимающейся аналитикой сырьевых товаров, для Бразилии дело не столько в увеличении добычи, сколько в перенаправлении потоков нефти из США на более высокооплачиваемые азиатские рынки — то, что она уже делала до ударов.

«Мы видим, что Бразилия уже работает на пределе возможностей по добыче. Это практически рекордный уровень, — сказал Смит Latin America Reports. — И поэтому мы можем увидеть, как эти объемы будут перенаправляться из других стран в Азию».

Он отметил, что сдвиг на рынках начался еще до войны: более половины бразильского экспорта нефти уже направлялось в Китай, а также наблюдался рост поставок в Индию.

Диего Ривера Ривота, научный сотрудник Центра глобальной энергетической политики Колумбийского университета, предупредил, что для Бразилии не все может быть так однозначно хорошо.

Любые выгоды во время кризиса, вероятно, носят временный характер, объяснил он, сказав: «Когда вы в кризисе, я думаю, любые объемы полезны. Но может ли [Бразилия] конкурировать с огромными объемами, которые проходят через Ормузский пролив в Азиатско-Тихоокеанский регион? Я так не думаю».

И в то время как Petrobras может выиграть от кризиса, макроэкономическая картина более сложная.

El País reported that food costs could rise as transport in Brazil is mostly automobile and its agricultural hub is heavily dependent on imported fertilizers, prices tied to the cost of natural gas.

«The balance between Petrobras and other companies is likely to be stronger. But the balance, say, of some grocery distributor, supermarkets or other companies will look different. It is very difficult to find a balance here.». . . . — Rivera told Latin America Reports.

Another South American country, small but oil-rich Guyana, could also benefit from closing the strait.

Oil production is growing rapidly, with new crude oil flows beginning to reach Asian markets.

Smith said: «As we see continued production growth in Guyana as new crude oil flows are added, we are beginning to see some of these volumes heading to Asia. This developing situation will definitely lead to more Guyanese volumes going to Asia.». . . .

The Venezuelan Question

With the world’s largest proven oil reserves, Venezuela naturally comes to mind during the global energy crisis.

But the collapsed infrastructure means the country is extracting only a small fraction of its potential. — Currently, about 1.2 million barrels per day. Despite this, rising prices can bring significant income to the country.

Alejandro Grisanti, director of Ecoanalítica, told El País that Venezuela could receive about $400 million for every additional dollar in the average oil price.

The abduction of President Nicolas Maduro on January 3 and the subsequent appointment of Acting President Delcy Rodriguez raised questions about how much the US controls Venezuela's oil flows.

Before the intervention, Venezuelan oil was claimed to have flown mainly to China through sanctioned shadow fleets. Since January, shipments to the United States have increased significantly as part of agreements involving trading houses such as Vitol and Trafigura.

Smith described a potential fight between Washington and Beijing over Venezuelan oil.

«In recent months, we have seen that Venezuelan oil, which had previously gone all the way to China, is now mostly heading or starting to flow into the US.». . . . — said Smith. «We have these trading houses that don't really understand who they're selling this oil to. So if China returns to the market and is willing to pay the most, it will head there. But if we see a massive increase in these flows back to China, the U.S. may follow.». . . .

Rivera approached this scenario with great skepticism, saying he would have «It's very difficult.» Imagine trading houses selling Venezuelan oil to China without «approval, so to speak, or blessings of the US administration in a particular case of Venezuela». . . .

Shock to consumers

In other Latin American countries that import oil products, if the war does not go down, costs for consumers could rise.

Rising prices for liquefied natural gas could also spur inflation, especially in countries such as Brazil, where goods are transported mainly by road rather than by rail.

As most of the food, goods and industrial products are transported by road, rising fuel prices will affect all consumer goods. Rivera warns that if it continues, the shock could «Meaning strong inflationary pressure». . . .

Chile is particularly vulnerable. Rivera described her as «a major importer in the region that imports the bulk of its consumption, both crude oil and petroleum products». . . .

Just hours after the first US strike, the Chilean peso weakened by about 14.8 pesos against the dollar, reaching 886.8 pesos per dollar.

Central American and Caribbean countries face even greater vulnerability.

«For some of them, oil products are used not only for transport, which is of course very important, but also for electricity production. — said Rivera. — Thus, they experience a double blow from this price pressure.». . . .

He noted that while some of these countries could be protected by long-term contracts, many others, such as Jamaica, the Dominican Republic and Nicaragua, relied heavily on the spot market and would immediately be hit.

According to experts, the degree of influence of the war in the Middle East on Latin American countries will depend on how it will develop and how long it will last.

Rivera says crisis has plunged the world into «Absolutely unprecedented» And that's it. «A nightmare.» The scenario, warning that if the conflict continues, the world could face «An energy crisis on a massive scale that we probably haven’t seen in our lives.». . . .

While some major oil and gas producers may get superprofits, it argues that broader economic consequences — Inflation and severe trade disruptions — outweighing any «The benefits of». . . .

«Negative consequences seem to outweigh possible wins». . . . — Rivera concluded.