South America's crude surge outpaces the US, yet barely dents the Hormuz supply hole

South America's crude surge outpaces the US, yet barely dents the Hormuz supply hole Kpler data show South America added 155 million barrels of crude exports this year, outpacing the US, while the Middle East has lost over four times as much. South America has added more new crude to the global market this year than the United States. Exports from the region jumped by 155 million barrels between January and May against the same period a year earlier, against an additional 112 million barrels shipped by the US, according to intelligence firm Kpler.⁷ That matters because the world is short of oil that does not depend on the Strait of Hormuz. The US-Israeli war on Iran has effectively shut the waterway, through which roughly a fifth of daily oil and LNG supply passes. About 675 million barrels of Middle Eastern crude have failed to reach buyers so far this year. Combined with production shut-ins, Kpler estimates the world has lost more than 1 billion barrels of supply since the war began.^7,5 Set against that hole, South America's extra barrels look modest. ICE Brent crude front-month traded at $95.47 on Friday (2026-06-05), up 0.58%. Prices are elevated, but they have not spiralled, partly because buyers have found replacement barrels in the Atlantic basin while demand has buckled elsewhere.⁷ Brazil is the engine. Its share of total Chinese crude imports rose from around 10% in January to about 18% in April, even as China's overall import demand weakened. The 1.43 million barrels a day that Chinese refiners took from Brazil in April was the highest monthly figure on record, beating the previous peak set in February.⁷ Guyana is the other half of the story. In seven years it has built nearly 1 million barrels a day of production capacity, as the ExxonMobil-led consortium brings on fields in the offshore Stabroek block, where more than 11 billion barrels of oil equivalent have been found over the past decade.^7,6 The growth is set to continue. Rystad Energy expects Guyanese output to rise 12% this year, to around 690,000 barrels a day, and to reach some 1.2 million by 2030. It sees Brazilian crude production climbing 10% this year, to above 3.7 million barrels a day.² For now, the new barrels are buying time rather than balancing the market. Morgan Stanley has called the oil market a race against time if the waterway stays shut into June. A 3.8 million barrel-a-day rise in US exports and a 5.5 million barrel-a-day cut in Chinese imports have together shielded the rest of the world from 9.3 million barrels a day of tightness.⁴ The supporting cast has thinned. The United Arab Emirates quit OPEC on Tuesday (2026-05-19) after 60 years, a departure expected to weaken an alliance that has long damped price swings.¹ One name is conspicuously absent from the boom. Despite the headline grouping it with Brazil and Guyana, Venezuela's flagship new projects are not bankable below $80 a barrel and will not start producing until at least the late 2030s, after global oil demand is expected to have peaked. The South American surge is, for now, a Brazilian and Guyanese affair.^3,7 The balance of risk is two-sided. The bearish case rests on supply that keeps arriving: record Brazilian flows into China, Guyanese ramp-ups, and a Chinese demand cut deep enough to absorb much of the shock. The bullish case is simpler. More than a billion barrels are already gone, and a single chokepoint still controls the outcome.^7,4 Watch two numbers. Whether Brazil holds or beats its April record of 1.43 million barrels a day into China, and whether the Strait of Hormuz stays closed through the summer. If the waterway reopens, the same demand destruction and South American supply that capped prices could swing the market the other way.^7,4