OPEC agrees to production increase, sending oil prices lower

The Ministerial Conference of OPEC and its allies (OPEC+) agreed to raise joint crude oil production by 540,000 barrels per day above the current level of 35 million barrels per day, starting in September, partially unwinding the voluntary cuts applied over the past year.

The decision caused a 4.5% drop in the price of Brent crude, which settled at $68.20 on the New York Mercantile Exchange (NYMEX).

The fall in international crude prices directly affects non-tax fiscal revenue in the region's producing countries, cutting oil revenue projections for Mexico, Colombia, Ecuador, Brazil and Venezuela by more than $3.8 billion for the second half of 2026.

State-owned companies Petrobras, Ecopetrol and Pemex announced preventive reviews of their capital expenditure (CAPEX) plans.

While lower crude prices reduce fuel import bills in Central America and the Caribbean, South American producing governments face pressure on their trade balances, forcing them to adjust budget allocations for public works.

What does SurEconomics think?:

The volatility of the oil market confirms the trap of the region's primarization. Indeed, extractive rents should be used to industrialize the country, finance a public energy transition and reduce Latin America's dependence on commodities.

Sources:

·       OPEC: Official Press Release of the 48th OPEC and non-OPEC Ministerial Meeting

·       International Energy Agency (IEA): Oil Market Report: Supply and Demand Balance August 2026