Brazil's oil industry expects a recovery in domestic demand in the next months driven by growing China imports, but the negative effects of COVID-19 are expected to last through the end of 2021, lobbying group IBP said in a note on Tuesday.
Consumption could drop by more than 10%, and oil prices should range between $20 and $40 per barrel without coordinated output cuts or social isolation, the institute estimated.
With a vaccine for the new coronavirus and production cuts, the drop in consumption could be limited to just 5%, with oil prices reaching the $60 to $70 range, it said. Brazil has the second-highest number of COVID-19 cases globally with more than 1.36 million cases.
China's demand for Brazil's oil boosted state-controlled Petroleo Brasileiro SA's exports to the Asian country to a record in April, despite the global drop in crude demand amid the pandemic.
"China's demand for oil will have an important role in this phase of recovery in Brazil," IBP Group said.
Most of the country's ongoing deepwater projects would be profitable with oil at $30 a barrel, according to Petrobras.
(Reporting by Sabrina Valle; Editing by Cynthia Osterman)