Brazil’s rise in the global oil market showcases a dynamic shift powered by increased production and geopolitical changes.
Before the pandemic and the Ukraine-Russia conflict in 2019, China was the largest buyer of Brazilian crude oil, claiming 64% of purchases.
By 2023, this share dropped to 46.6%, while the European Union (from 6.9% to 23%) and other Asian countries (from 7% to 9%) upped their stakes significantly.
From 2019 to 2023, Brazil’s oil sales surged from $24.2 billion to $42.5 billion, with exports to China growing 28% and to other regions by 60%.
As Funcex economist Daiane Santos notes, this diversification highlights Brazil’s strategic adaptation to changing global demands, especially as China faces economic slowdowns.
In early 2023, Brazil’s oil exports expanded, leading sales to Asia, the European Union, and the United States and reflecting broader market penetration.
This expansion contributed to a 73.9% increase in oil exports, totaling $7.520 billion, driven mainly by a significant rise in volume.
Brazil, currently the ninth-largest oil producer and tenth in exports, benefits from the lucrative pre-salt layer and global price trends, pushing its export figures.
2024 production is projected to increase, potentially setting a new record with $50 billion in exports.
Future post-2030 remains uncertain
However, the future post-2030 remains uncertain with the global energy transition, possibly shifting exploration strategies.
Despite this, oil’s role in Brazil’s trade performance remains strong, contending with major exports like soy and iron ore.
Even with fluctuating prices and a slight dip in sales, the sector is expected to bolster Brazil’s trade surplus, contributing to economic stability and growth.
Last year’s record $98.8 billion surplus may well be matched or exceeded in 2024, underlining the strategic importance of oil in Brazil’s export portfolio.