Although traditional producers such as Colombia, Venezuela and Ecuador have faced difficulties in recent years, countries such as Brazil and Guyana have seen remarkable growth in the past decade. Argentina, meanwhile, is preparing to join the ranks of oil exporters on large-capacity carriers (VLCCs), while Suriname could follow in Guyana’s footsteps. However, the region remains behind in the refining sector compared to other areas of the world.
In addition, South America excels in the production of biofuel feedstocks, giving it the opportunity to leverage its agricultural capacity to meet future fuel demand. In terms of geopolitics, Venezuela remains under international sanctions, while Russia has increased its presence in the region’s oil market, affecting US refineries.
Overview
Demand performance in South America has been volatile in recent years, with economies such as Brazil and Argentina experiencing prolonged recessions. Although Guyana’s development has been driven by oil, its small economy limits its influence on regional demand.
Moderate growth in demand in the region is projected, with total demand increasing by 400 kbd by 2030 compared to 2024 levels. Against this backdrop, limited expansion in refining capacity is favouring the product tanker market, although rising biofuel production and blending regulations could slow the rise in hydrocarbon imports.
For crude tankers, the outlook is more favourable. Oil production is forecast to increase by 1.3 million barrels per day (mbd) by the end of the decade, with much of this amount destined for export. Brazil and Guyana will continue to be the main drivers of this growth, while Argentina could start exports in 2026. In addition, if Venezuela rejoins international markets, its share could increase exports from the region, significantly benefiting crude tankers.
Crude oil market in the US Gulf and Latin America
As far as the US Gulf and Latin America are concerned, the market is showing mixed signals. In the Gulf, freight costs have decreased due to lower demand, although signs of recovery have recently been observed with the reactivation of contracts for October. In Brazil, exports have been quiet this week, with prices on the decline, although an increase in activity is expected in the coming days. Transport costs for cargoes between the US Gulf and China are around $7.2 million, while shipments between Brazil and China are valued at approximately WS50.
