Brazil oil and byproduct exports hit record numbers

Although the COVID-19 pandemic hit Brazil’s economy hard, oil exports have registered record numbers.

According to the latest data from regulator ANP, between January and July, the country exported 316Mb (million barrels), or 1.5Mb/d, up 37% compared with the same period in 2019, which was already a record year for oil exports.

Due to the oil price drop, however, oil export revenues fell from US$13.9bn to US$12.2bn.

Oil imports also fell, to 34.7Mb (165,000b/d), or by 20.4%, favoring the oil trade balance, thanks to lower consumption amid the quarantines to contain the spread of coronavirus.

Spending on oil imports reached US$2bn compared to US$3bn in January-July 2019. 

Oil byproduct exports were a record 75.8Mb, up 53.7%, but revenues dipped to US$3.48bn compared to US$3.53bn a year before. 

Imports of oil byproducts totaled nearly 102Mb, down 16%, with total spending of US$4.96bn, compared with US$7.9bn in the same period of 2019. 

China’s strategy to stock oil in the first four months of the year, taking advantage of the low oil price, is one reason for the export growth, the technical coordinator of the strategic petroleum studies institute (Ineep), Rodrigo Leão, told BNamericas. 

“Besides, Petrobras has export agreements with China and other countries, which guarantee international demand for Brazilian crude,” he added. China is the main importer of Brazilian crude. 

The growth in oil byproducts is mainly due to Brazil’s competitive advantage in the market of low sulfur bunker oil, whose use was spurred by a new International Maritime Association (IMO) regulation. 

Brazil’s advantage stems from the “sweeter” oil coming from the Santos and Campos basins.

“We managed to rapidly convert our refineries for the navigation oil, and Petrobras did a good job in the commercial area, finding demand for a new product, with which it had not had a historical connection, finding demand in Singapore, for instance”, Leão said.

Leão does not see much room for more export growth, though. “If Petrobras manages to maintain the current level, that would already be a good performance”, he said, considering that oil consumption has decreased in Europe and the US keeps needs less imports because of its shale gas and tight oil revolution. 

Production

After a sharp decline in May, oil output recovered in July, totaling 3.08Mb/d, up 11% year-over-year, and nearing its January record level, when production surpassed 3.1Mb/d, according to ANP data.