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Since the EU embargo on Russian oil products, Brazil has become a major buyer of Russia’s diesel and gasoil, with Brazilian imports soaring as Moscow found new outlets for its petroleum products banned by the EU and U.S.
Since the EU embargo on imports of Russian fuel came into force in early February 2023, Russia has diverted most of its diesel exports – previously going to the EU – to Turkey, the Middle East, North and West Africa, and Brazil in South America.
Russia has shipped so much diesel and other fuels to Brazil that it became the top diesel supplier of the South American country last year, surpassing the U.S. as the cheaper Russian diesel has spurred record imports.
In 2023, Brazil’s imports of Russian diesel surged by a massive 6,000% to 6.1 million tons, from just 101,000 tons a year earlier, the Financial Times reported on Tuesday, citing official government figures.
The value of Brazilian diesel imports in U.S. dollars soared by 4,600% to $4.5 billion, compared to $95 million worth of diesel purchases from Russia in 2022, according to government data.
While there has been some speculation that Brazil, under leftist President Luiz Inácio Lula da Silva, may be sympathetic to Russia, the main reason for the surge in imports of oil products from Russia is the cheaper price, with which Brazil is looking to support its huge agriculture sector and keep domestic fuel prices relatively low.
In August 2023, Russia was already the top supplier of diesel to Brazil, having surpassed the United States. Between January and August, Russia had a 35.6% share of the value of diesel imported by Brazil, and a 40.6% share in terms of volumes, Brazilian business daily Valor reported in September.
Meanwhile, a surge in fuel oil exports pushed Russia’s refined petroleum product shipments in the four weeks to December 31 to the highest level in eight months, data from Vortexa compiled by Bloomberg showed earlier this month.
In December, Brazil was the third-largest buyer of Russian oil products with a 10% share, preceded only by the largest buyer Turkey with 24% and China with 12%, the Centre for Research on Energy and Clean Air (CREA) said in its monthly analysis of Russian fossil fuel exports and revenues.
Last month, all of Brazil’s imports of Russian fossil fuels consisted of oil products. Oil imports from Russia jumped by 16% month-on-month, mirroring the rise in volume of total oil imports for the month. Russia’s share of Brazil’s oil imports rose throughout 2023, surging from 13% in January to 40% in December, CREA said.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.