Oil products from Russia and Russian oil have undermined the dominant role of the United States in fuel supplies to Brazil. In February, exports from the United States to the Latin American country fell to their lowest in seven years. US petroleum products are squeezing Russian and Indian oil out of Russia.
According to the US Department of Energy’s Energy Information Administration (EIA), petroleum product exports to Brazil fell to 6.1 million barrels in February. This is the lowest since March 2016. It is also half the monthly average for 2022.
Shipments of US petroleum products have been on the decline since January, when Russia began ramping up exports to new destinations on the eve of the EU embargo, which came into force on 5 February.
Meanwhile, US petroleum product imports fell not only in Brazil but also in Colombia, which recorded its lowest level in two years in February at 2.6 million barrels.
According to Reuters, Russian companies delivered 1.5 million barrels of diesel alone to Brazil in February, although a year ago there were no such deliveries at all.
India, which buys Russian oil at a discount and sells petroleum products from it abroad at a significant margin, has also rapidly increased exports to the Latin American country. Brazil imported nearly 2.5 million barrels from India in February: jet fuel and diesel, according to the Indian Commerce Ministry. A year ago, shipments were only 500 barrels.
Meanwhile, the share of Russian petroleum products in Brazil continues to rise, while the US share apparently declines. Argus estimates that April cargoes may have risen to 4.5 million barrels – 53% of all diesel imports into Brazil.
“It is very difficult to compete, with Russian diesel coming in at a lower price than local refineries and foreign suppliers,” said Argus diesel market specialist Gabriella Moreira.
Reuters noted that many small regional suppliers of petroleum products have taken advantage of the situation. Where the US is diverting supplies of its petroleum products is international fuel trading hubs Singapore and the Netherlands. Back in December, the latter set a record purchase of 22m barrels, but in February it had already fallen to 14.4m barrels.