Brazil’s fuel imports from Russia have surged, establishing Moscow as its main supplier. This uptick comes as Russia seeks new trade avenues after European Union sanctions.
Brazil’s oil derivatives imports from Russia are projected to rise by 25% this month compared to July, reaching approximately 235,000 barrels daily, according to Kpler data.
This surpasses previous imports from the U.S., which was once Brazil’s top external fuel supplier.
This increased reliance on Russian fuel began in February when the EU imposed bans on Russian fuel imports.
As the U.S. and its allies attempt to curtail Russia’s oil income due to its involvement in the Ukraine conflict, Russian fuel prices have dipped, necessitating competitive pricing for new markets.
Securing discounted barrels is financially advantageous for Brazil, given the consistent push to lower fuel costs, remarked Viktor Katona, Kpler’s chief oil analyst to Bloomberg.
G7 and EU have implemented a price ceiling on Russian products traded by their member countries, setting it at US$100 per barrel for key derivatives like diesel and US$45 for cheaper ones such as lubricants.
Under this system, G7 nations can only import Russian shipments if they cost below these price points.
Katona estimates to Bloomberg that buying Russian diesel has slashed Brazil’s imported fuel prices by US$10 to US$15 per barrel.
Since this price cap’s inception, Brazil has become the second-largest global buyer of Russian diesel, only behind Turkey, Kpler reports.
Diplomatically, Brazil maintains a neutral stance on the conflict’s blame.
Russia began supplying Brazil with gasoline from June onwards, albeit at a smaller scale. Naphtha shipments may also see an increase, Kpler suggests.
Being the largest Latin American market, Brazil is a focal point for Russian refineries, explained Katona.
“Even Brazilian firms acknowledge the competitive edge derived from Russian diesel purchases, predicting a continued trend,” he added.