The escalation of corruption allegations against President, Michel Temer has compounded challenges faced by Brazil’s gas and LNG sectors. The industry has already been battered by the country’s weak macroeconomics, and the deepening political crisis has the potential to damage its long-term prospects.
Brazil has once again become embroiled in political turmoil that could cost its president his job. Economic reforms – including to the oil and gas sector – could be delayed, watered-down or shelved. This in turn would prolong Brazil’s economic weakness and deter investment in its upstream sector. Brazil’s gas demand is expected to remain under pressure this year and next because of the unfavourable economic climate, which will further reduce the country’s reliance on gas and LNG imports.
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