A new analysis from Rystad Energy highlights Latin America’s strong position in the global oil market, forecasting that offshore production from Brazil, Guyana, and Suriname, alongside Argentina’s Vaca Muerta shale, will supply cost-competitive barrels through the end of the decade.
Global liquids demand is expected to peak around the early 2030s at approximately 107 million barrels per day (bpd), according to Rystad Energy’s research.
The forecast indicates that demand will stay above 100 million bpd well into the 2040s before a gradual drop-off, reaching about 75 million bpd by 2050.
South America’s crucial supply role
The oil market’s balance hinges on supply from non-OPEC+ countries, with South America being particularly crucial.
It is expected to deliver cost-competitive barrels that will compensate for the decelerated growth of US shale production, even if prices remain low, Rystad Energy said.
“Today’s wells are projected to deliver less than half of their current output by 2030, underscoring the need for continued investment in both new and existing fields,” Radhika Bansal, vice president in Rystad Energy’s Upstream Research team, said in the analysis.
Looking ahead, continued investment and a stronger focus on deepwater expansion as the supply gap might widen after the mid-2030s.
Non-OPEC+ producers are anticipated to contribute nearly 60% of conventional under-development and discovered oil volumes, translating to almost 5.9 million bpd, by 2030, the analysis showed.
Offshore expansion drives supply
Meanwhile, South America is projected to be the primary driver of supply growth this year, contributing over 560,000 bpd of crude and condensate, with North America following at approximately 480,000 bpd.
Looking ahead to 2026, South America’s additions are expected to surpass 750,000 bpd.
This sustained increase will position the region, along with the Middle East (excluding OPEC+ countries), as one of the few with additions exceeding 500,000 bpd, fueling overall non-OPEC+ growth.
By 2030, offshore oilfields brought online since 2020 are projected to make up more than 65% of South America’s conventional production, according to the analysis.
This substantial expansion is largely driven by developments in Brazil and Guyana, which are increasing their utilisation of floating production, storage and offloading (FPSO) vessels.
The deceleration in the rate of new discoveries underscores the continued necessity for exploration, with only around 420 million barrels of liquid reserves found in the last year. This figure represents the lowest level since 2017.
According to Rystad Energy’s base case projections, oil demand is anticipated to exceed current supply by the middle of the next decade (the mid-2030s).
This outlook highlights the increasing necessity for renewed exploration and enhanced oil recovery, a domain in which South America is strategically positioned to play a vital role.
Unlocking future reserves
Upstream investment in South American oilfields reached its highest level since 2015 last year, exceeding $46 billion.
This upward trend is expected to continue this year, with investments projected to grow by 10%.
Although growth is anticipated to slow in subsequent years, annual investments are expected to remain near the $50 billion mark throughout the next decade.
This spending will be divided into two main categories.
New projects, or Greenfield Investments, will be primarily driven by Brazil and Guyana’s undeveloped assets.
Existing, producing fields in Argentina, Brazil, and Colombia will be the focus for sustaining and expanding current operations, which is referred to as Brownfield Spending.
The upstream sector in South America is a cornerstone of the global energy landscape, driven by substantial contributions to both conventional oil production and new discoveries over the last ten years, Rystad Energy said.
The region is a key and sustained source of net oil exports, a role that will continue, spearheaded by Argentina, Guyana, Suriname, and Venezuela.
Brazil, Colombia, and Ecuador are also projected to maintain significant export levels, at least until the mid-2030s.
The region holds considerable future potential, with adequate exploration investment being vital to unlock new volumes and increase recoverable resources from existing fields.
Offshore northern basins are becoming a notable exploration prospect in Peru. Recently, a partnership comprising Chevron, Anadarko (Occidental Petroleum), and Westlawn was formed to explore three offshore blocks—Z-61, Z-62, and Z-63—situated in the Mar de Grau, off the coast of northern La Libertad.
“Successful exploration could add significant new reserves, where a commercial discovery could yield between 100,000 and 150,000 barrels per day in peak production,” Rystad said.
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