Production of oil and gas in Latin America has increased by up to 9% since the war in Ukraine, driven by the energy crisis sparked by the Russian invasion.
Venezuela, in particular, has seen a rise in its oil extractions following the recent easing of US sanctions.
These significant increases in production and exports, averaging 9% for natural gas and crude oil, have been a response to the window of opportunity created by concerns about energy security caused by the Russian invasion and the subsequent sanctions on its supply, resulting in favorable prices.
Carlos Garibaldi, the Executive Secretary of the Association of Oil, Gas, and Renewable Energy Companies of Latin America and the Caribbean (Arpel), highlighted these developments during a sector conference organized by the Organization of the Petroleum Exporting Countries (OPEC) in Vienna. Garibaldi noted that the magnitude of the increase varies from country to country, with Argentina experiencing a 14% increase, while Brazil’s increase stands at 8%.
It is worth mentioning that 60% of Latin America’s energy matrix still relies on hydrocarbons (gas and oil). Among the countries with significant potential in the region, Venezuela stands out, having managed to increase its oil extractions following the recent easing of US sanctions. The need to find alternatives to Russian oil sources led to a positive shift in the US stance towards Venezuela, resulting in the country’s current highest recorded crude oil production since early 2020.
Garibaldi emphasized that the Venezuelan government, led by Nicolás Maduro, must now take concrete steps to establish a stable regulatory framework, even if the lifting of sanctions is not foreseen until after free elections are held. As for Brazil, Garibaldi recommends continued exploration in offshore areas to prevent a decline in production starting from 2027, unless new discoveries are made.
Another notable development is the increase in shale oil production in Argentina’s sedimentary formation called «Vaca Muerta.» Some experts predict that production could exceed one million barrels per day by 2035, up from the projected 300,000 barrels per day for this year. If these plans materialize, Argentine oil exports could reach around $20 billion, a figure that would increase further with the addition of gas, according to Garibaldi.