Brazilian oil workers begin five day strike

The Brazilian state-run oil producer, Petrobras, says the strike has cut its production by 7%. The union, however, is saying the walkout has cut production by more like 22%, approximately 400,000 barrels.

Employees at 42 oilfields off the coast of Rio de Janeiro, are striking over working conditions. At the heart of the dispute is a union demand that a day spent travelling from oil platforms in the Campos basin to the mainland should be counted as work.

The Campos basin accounts for 80% of Petrobras' daily production of 1.8 million barrels of oil. But the Petrobras president, Jose Sergio Gabrielli, has been playing down the impact of the dispute saying that daily variations in oil prices do not have a great significance.

World oil prices on Friday hit a new record high, rising above $147 a barrel because of a range of factors, such as tensions over supplies from Iran and Nigeria. But analysts said the strike at Petrobras was also having an impact as the situation has the potential to escalate, as further disruption is being discussed at all Petrobras facilities, including refineries and terminals, as part of union demands for a bigger share of profits for employees.

The company has recently announced a number of major oil finds offshore, which have attracted huge international attention.

But these are deep beneath the seabed and the costs of production, which is still several years away, are expected to be high.