China's record purchase boosts Brazil monthly oil exports to second-highest

China bought a record volume of crude oil from Brazil in March, bringing the South American nation’s total monthly crude exports to their second-highest level on record, according to data released this week by the Brazilian government.

China imported 1.6 million barrels per day (bpd) of crude oil from Brazil last month, the data showed, as global energy flows have been reshaped as a result of the U.S.-Israel war on Iran. The previous record of around 1.46 million bpd was recorded in May 2020.

China’s record purchases led Brazil to export a total of 2.5 million bpd of crude oil in March across all markets. Brazil’s total crude exports rose 12.4 percent from February to mark the second-highest volume registered for any month, only behind March 2023.

“The increase in exports was already expected, as the closure of the Strait of Hormuz led importing countries to intensively seek supplies from alternative sources,” said Bruno Cordeiro, a market intelligence analyst at consultancy firm StoneX.

India was the second-largest destination for Brazil’s oil exports in March, Cordeiro noted, as it also sought a workaround to the shuttered Strait, through which about 20 percent of global crude flows passed prior to the war.

DIESEL

Brazil reduced diesel imports by 25 percent in March compared to February, to 1.05 billion liters, the data showed, a potential warning sign for a country that relies on imports for about a quarter of its diesel needs.

The share of U.S. diesel in Brazilian imports fell to less than 1 percent in March from 8.3 percent in February, according to government data. Cordeiro said the move is likely due to the U.S. redirecting fuel to regions that have been paying higher premiums, especially Asia.

Meanwhile, Russia expanded its share in the Brazilian market to 75 percent from 58 percent, yet its shipments of diesel to Brazil remained mostly unchanged from February, Cordeiro said.

Reuters