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Guyana’s Oil Boom Matters More Than Ever

https://oilprice.com/Energy/Energy-General/Guyanas-Oil-Boom-Matters-More-Than-Ever.html

Excerpt:

In a surprise development, the tiny South American nation of Guyana recently emerged as a major oil exporter. In a mere four years, the former British colony of one million went from first discovery to first oil. Guyana has cemented its place among South America’s leading oil producers, pumping nearly one million barrels per day, making it the continent’s third-largest oil producer. The rapid expansion of Guyana’s offshore oil industry will enhance energy security in the Americas at a crucial time, with heightened Middle East tensions sharply impacting global supply.

Official government data shows Guyana lifted 888,000 barrels of crude oil per day at the end of May 2026. This was 4% lower than the 924,000 barrels being extracted at the start of the month. There are four active floating production, storage, and offloading (FPSO) vessels operating in offshore Guyana, with a fifth, named the Errea Wittu, expected to start up during 2026 when the Uaru project comes online. ExxonMobil’s $12.7 billion Uaru project, upon reaching capacity, will add 250,000 barrels per day to Guyana’s petroleum output, lifting production over one million barrels daily.

This will allow the former British colony to surpass Venezuela, making it South America’s second-largest oil producer behind Brazil. While Caracas has expanded production since January 2026, growth is constrained by the need to rebuild Venezuela’s heavily corroded petroleum infrastructure, which will require tens of billions of dollars and at least a decade. Speaking of Venezuela, Washington’s decision to intervene in the near-failed state at the start of 2026 removed the most serious threat to Guyana’s burgeoning petroleum boom.

.....Those facilities indicate just how rapidly Guyana’s oil production will expand. Indeed, it is anticipated the tiny South American country will be pumping up to 1.9 million barrels of crude oil, including condensate, by 2030. This will cement Guyana’s place as South America’s second largest oil producer behind Brazil, unless Venezuela proves capable of significantly boosting petroleum output over the same period, which is doubtful. That substantial increase in hydrocarbon output will go a long way to securing energy supply in the Americas.

Disruption to shipping passing through the Strait of Hormuz poses considerable risks to regional countries, like Colombia and Peru, which are increasingly dependent on fuel and other hydrocarbon imports. Heightened Middle East tensions, along with the closure of the Strait of Hormuz, see greater demand from countries in Asia and Europe for oil that is not shipped through the vital choke point. As a result, demand for Guyana’s petroleum is soaring ever higher, just as it is for neighboring Brazil, with China now receiving most of that country’s petroleum exports.

The largest buyers of Guyana’s crude oil are the United States, the Netherlands, Italy, and Panama. Indeed, the volume of Guyana’s oil shipments to the U.S. has been climbing at a solid clip since 2020.

.....Guyana’s massive oil boom, which is still in the early stages of development, is rewriting the global energy map. Along with Brazil and Argentina, the former British colony is leading a major surge in non-OPEC petroleum production growth. Unlike many OPEC producers, Guyana, like other South American oil producers, is not dependent upon access to the Strait of Hormuz or Red Sea to ship oil to key export markets. This prevents war, terrorism, or other geopolitical incidents, which regularly occur in an extremely volatile Middle East, from impacting shipments.