Latin America Drives Global Oil Supply Growth in 2026

Latin America has emerged as the principal driver of non-OPEC+ oil supply growth in 2026, with Brazil, Guyana and Argentina expected to add more than 700,000 barrels per day this year and lift regional production above 8.8 million bpd. Rystad Energy and the US Energy Information Administration both rank the “Big Three” as the engine of the global supply expansion, with Brazil alone projected to produce more than 4.2 million bpd on the back of pre-salt FPSO ramp-ups. Deepwater offshore investment is forecast at US$42 billion in 2026, up 7.7% year-on-year, with the region’s structural advantages largely insulated from short-term Venezuelan supply discussions.

The Rio Times, the Latin American financial news outlet, reports that the regional supply story has now consolidated as the most important non-OPEC+ narrative in the global energy market. Rystad Energy vice-president of Oil and Gas Research Radhika Bansal calls Brazil, Guyana and Argentina “the Big Three of the region,” noting they will continue to outperform Venezuela through at least 2030 regardless of any short-term restoration of Caracas-controlled exports.

The US Energy Information Administration estimates that Brazil, Guyana and Argentina will account for half of the 800,000 bpd global non-OPEC supply increase forecast for 2026. The expansion is supported by the pre-salt resilience in Brazil, the Stabroek and Liza-Payara complex in Guyana, and the Vaca Muerta unconventional play in Argentina, three structurally different production bases that share competitive break-even economics.

The Brazilian Engine and the Pre-Salt Ramp-Up

Brazilian production will be the largest single contributor to the Latin American expansion, with output projected above 4.2 million bpd by year-end. The Q1 2026 Petrobras release showed total production of 3.23 million boed, a record and up 16.1% year-on-year, driven by the P-78 FPSO in Búzios, the Alexandre de Gusmão FPSO in Mero, and the Anna Nery and Anita Garibaldi platforms in Marlim and Voador.

The Búzios field set two daily records in March 2026, producing 1.037 million barrels of oil on March 20 and exporting 12.4 million cubic metres of gas on March 25. Ten new wells started up in Q1, seven in the Campos Basin and three in the Santos Basin, with Petrobras targeting 3.4 million boed for full-year 2026 against the company’s November 2025 investor-day guidance.

The Equinor Bacalhau field began operations in October 2025, adding capacity that further extends Brazil’s competitive advantage in the deepwater pre-salt segment. Industry forecasts now project Brazilian production above 5 million bpd by 2030, with the Equatorial Margin licensing decision the principal upside risk to that trajectory.

Argentina’s Vaca Muerta and Guyana’s Stabroek

Argentina’s Vaca Muerta shale formation in Neuquén province is the second-largest unconventional reserve outside North America, with production growth accelerating under the Milei administration’s energy-sector deregulation. Argentine output is set to reach roughly 800,000 bpd in 2026, with infrastructure constraints around the Vaca Muerta Oleoducto Sur project as the principal short-term bottleneck.

Guyana’s Stabroek block, operated by ExxonMobil with Hess and CNOOC as partners, hosts a sequence of FPSO vessels including Liza Destiny, Liza Unity, Prosperity and the soon-to-start One Guyana. Guyanese production is projected to reach 900,000 bpd by year-end 2026, an extraordinary trajectory for a country whose entire population is under one million. The strategic importance of these volumes to global supply security extends beyond their absolute scale.

The Venezuela Question and the Capital-Allocation Frame

A potential restoration of Venezuelan supply remains the principal short-term variable. Rystad estimates that approximately 300,000 bpd of Venezuelan production could re-enter the global market under a political-transition scenario, but the consultancy considers the impact on Latin American capital allocation as marginal. “A restructuring of the Venezuelan oil industry will be expensive and slow, with the Big Three of the region remaining largely indifferent to the estimated short-term return of Venezuelan oil,” Bansal said.

The capital-allocation logic is clear. The break-even economics of pre-salt, Stabroek and Vaca Muerta projects remain competitive at current Brent levels, while Venezuelan infrastructure rehabilitation requires multi-billion-dollar capital expenditure with multi-year payback periods. The deepwater offshore investment forecast of US$42 billion across the region in 2026 reflects continued committed-capital flow into the Big Three, not capacity reallocation toward Caracas.

Connected Coverage

The Latin America oil supply expansion sits inside the broader oil-shock narrative covered in our Petrobras Q1 record production analysis and our Brazil-Russia diesel pivot piece.

The geopolitical context is mapped in our Iran War and Hormuz Crisis 2026 guide, with regional macro analysis in the Latin America Economy 2026 guide.

What to Watch

• Petrobras Q2 results: how the Brent move above US$100 flows through to revenues now that the Q1 lag effect has unwound.
• Equatorial Margin licensing: IBAMA decision on Foz do Amazonas drilling, the principal structural upside catalyst for Brazilian production past 2030.
• ExxonMobil Guyana One Guyana FPSO start-up: the next major capacity addition lifting Guyana toward 900,000 bpd.
• Vaca Muerta Sur pipeline: progress on the Argentine infrastructure project that conditions the country’s 2027-2030 production trajectory.
• Venezuela transition timeline: any concrete development that would materially accelerate the 300,000 bpd potential supply return.

Frequently Asked Questions

How much will Latin American oil production grow in 2026?

Latin American total production will exceed 8.8 million bpd in 2026, with Brazil, Guyana and Argentina adding more than 700,000 bpd combined. The “Big Three” account for roughly 50% of the 800,000 bpd global non-OPEC supply expansion forecast by the US EIA for the year.

How much oil will Brazil produce in 2026?

Brazilian production is projected above 4.2 million bpd in 2026, driven by pre-salt FPSO ramp-ups. Petrobras Q1 hit a record 3.23 million boed (+16.1% year-on-year), with Búzios reaching 1.037 million barrels per day on March 20 and 12.4 million cubic metres of gas on March 25.

What is the role of Vaca Muerta in Argentine production?

Vaca Muerta is Argentina’s principal unconventional shale formation, the second-largest outside North America, with output target of 800,000 bpd in 2026. Production growth is accelerating under Milei’s energy-sector deregulation, with the Vaca Muerta Sur pipeline as the main short-term infrastructure bottleneck.

Could Venezuela displace the Big Three?

Rystad estimates Venezuela could return 300,000 bpd to global supply in the short term, but considers Brazil, Argentina and Guyana “largely indifferent” through 2030. Pre-salt, Stabroek and Vaca Muerta break-even economics remain competitive while Venezuelan infrastructure rehabilitation requires multi-year, multi-billion-dollar capex.

Updated: 2026-05-12T12:00:00Z