Energy: one reason to defend Mercosur

 



Brazil has played a crucial role in avoiding a widespread blackout in Argentina in February 2025. Brazilian electricity exports to its neighbour averaged 700 MW, an increase of 121% compared to the same month last year and 99% more than in January. This volume, the highest since August 2024, is estimated to cover around 5% of Argentina's national consumption.

The need for this energy assistance arises from a combination of factors in Argentina. The country faced record electricity consumption in February due to intense heat waves, which have caused extreme weather effects such as heavy rains and floods, especially in Buenos Aires. These events have highlighted the fragility of Argentina's electricity system, which suffers from chronic problems such as lack of investment, deteriorating infrastructure and dependence on energy imports.

Argentina's energy crisis is part of a broader context of economic and political challenges. Javier Milei's government has implemented measures such as the revision of tariffs and the declaration of an energy emergency, but these actions have generated inflation and social discontent without resolving the sector's structural problems. Moreover, Milei's consideration of abandoning the Paris Agreement adds uncertainty about the country's energy future.

This situation has highlighted the importance of regional energy cooperation. In addition to Brazil, Chile has also provided assistance, albeit on a smaller scale. Argentina's dependence on its neighbours to meet its energy demand at critical moments has generated reflection on relations between Mercosur members and the need to prioritise pragmatism over ideological differences. This scenario has served as a lesson for both Milei and Lula, demonstrating the value of regional collaboration in times of crisis.

Comments

Post a Comment

Popular posts from this blog

Argentina and the evolution of South America's gas geopolitics

Image
  According to Bolivia's state-owned oil company YPFB, Bolivia's natural gas exports to Argentina have ceased following almost two decades of trade. This is due to a decline in production in Bolivia and Argentina's increasing status as a fuel exporter. This marks the end of the Kirchnerist and Evista (Evo Morales) era, as well as the true nature of the evolution of Bolivian fields and disinvestment in exploration and development in the Andean country. It is important to recall that during the Kirchners' initial period of statist rule, significant damage was done to Argentina's gas capabilities in the areas of exploration, development and transportation. Following the expropriation of foreign private companies exploring and establishing production capacities, Bolivia was able to capitalise on the results of their work in the gas industry. The Bolivians failed to capitalise on the opportunities presented to them and are now facing challenges. The Argentine turnaroun...
Read more

The unimportance of Venezuelan oil

Image
  Venezuela's century-old oil industry is living its worst hours not because of sanctions but because of Chavismo's incompetence. Hugo Chávez came to power with the monetary and political support of Arab kingdoms that saw a defiant Venezuela growing its oil production before 1998. Had Hugo Chávez not come to power, Venezuela would be close to 8 million barrels per day right now. 25 years later, they are celebrating if they reach 900,000 barrels per day, after receiving a production capacity of 3.5 million barrels per day in 1999. The Saudis and other kingdoms wanted Venezuela to stay part of OPEC. They wanted to keep the same levels of production and helped Chávez come to power. But then he betrayed them by working with the Persians, although he was still employed with the task at hand. Chávez did the dirty work of not only keeping production levels the same but destroying them, which benefited his Arab, Russian, North American, Latin American, African etc. oil competitors....
Read more

Latin America: conflict and energy

Image
  Latin America is affected by remote conflicts. The region also has its own conflicts, but they are not as affected by this as conflicts in regions that sell or consume raw materials. These are the Middle East and Asia. Verisk Maplecroft says that conflict-affected areas have grown by 65% since 2021. They now cover 4.6% of the world's land, up from 2.8% three years ago. That's almost twice the size of India. The upsurge in conflict is having a significant impact on people, migration, geopolitics, the economy and international trade. More people are dying in violence. By the end of the year, there will be more than 200,000 deaths from conflict, which is 29% more than in 2021. The Middle East and Ukraine are the most intense war zones. Both could get worse. Twenty-seven countries, including Ecuador, Colombia, India, Indonesia and Thailand, have seen a big rise in risk since 2021. But sub-Saharan Africa has seen more conflict than any other region. The Indo-Pacific region is ...
Read more