Exclusive: U.S. Inquired if Brazil’s Petrobras Could Increase Oil Output; Response Was No – Sources

By Gabriel Stargardter, Gram Slattery, and Rodrigo Viga Gaier

RIO DE JANEIRO – In March, U.S. government officials reached out to Brazil’s state-controlled oil company, Petrobras, to discuss the possibility of increasing crude oil production in response to the surge in global prices triggered by Russia’s invasion of Ukraine, according to three sources familiar with the situation.

However, these discussions did not result in any agreements. Petrobras officials maintained that production levels are dictated by the company’s business strategy, not diplomatic pressures, and emphasized that a significant increase in output in the short term would not be feasible due to logistical limitations.

A spokesperson for the U.S. State Department stated, "We are doing everything possible with our allies and partners to mitigate the economic impacts of Russian actions on other economies like Brazil. We are working with energy companies to enhance their capacity to supply energy to the market, particularly as prices rise." The spokesperson did not provide further details regarding the March meeting with Petrobras.

Petrobras has denied any meeting took place with representatives from the U.S. State Department and did not respond to inquiries about whether any other U.S. agency had been in contact.

Following Russia’s incursion into Ukraine, Washington has actively sought to secure global oil supplies while attempting to maintain price stability. U.S. officials are also keen on improving ties with Brazil’s right-wing government under President Jair Bolsonaro, despite existing differences over the Ukraine conflict and environmental policies. Brazil ranks as the ninth-largest oil producer globally.

In the U.S., officials have urged domestic oil producers to increase their output. U.S. Energy Secretary Jennifer Granholm characterized the situation in March as a "war footing." Additionally, U.S. officials visited Venezuela for high-level discussions for the first time in years, including talks on potentially easing certain oil sanctions.

Brazil’s Minister of Mines and Energy, Bento Albuquerque, disclosed in April that he had met with Granholm on two occasions to discuss Brazil’s role in stabilizing global crude prices. Few details regarding these talks have been publicly revealed.

During their March discussions, U.S. officials inquired about Petrobras’s capacity for short-term production increases. Sources indicated that initial communication between the U.S. and Brazilian governments was followed by an informal meeting with Petrobras officials.

Ultimately, Petrobras representatives conveyed that increasing production at this time was not feasible due to strategic goals and logistical constraints. However, they confirmed that the company is working on ramping up medium-term production as part of a plan to add 500,000 barrels per day by 2026.

Although Petrobras executives assert that the company operates independently of government influence, the state remains its largest shareholder.