In this list
Oil | Shipping

Brazil's diesel market faces uncertainty amid Russian oil products ban

Energy | Oil | Refined Products | Jet Fuel

Jet Fuel

Crude Oil | Natural Gas | Natural Gas (North America) | Shipping

Market Movers Americas, Dec 4-8: US crude weighs OPEC+ decision, Panama Canal continues to impact shipping

Oil | Energy Transition | Energy

APPEC 2024

Natural Gas

Norwegian gas supplies to Europe, UK surge to 10-month high in November

Agriculture | Energy | Oil | Refined Products | Gasoline

Avaliação de preço Platts para o etanol anidro da região NNE do Brasil

Electric Power | Energy Transition

Conversations at COP28

For full access to real-time updates, breaking news, analysis, pricing and data visualization subscribe today.

Subscribe Now

Brazil's diesel market faces uncertainty amid Russian oil products ban


Russia supplied nearly 80% of Brazil's diesel imports in recent months

Market participants concerned if existing deals would be completed

  • Author
  • Maria Jimenez Moya
  • Editor
  • Haripriya Banerjee
  • Commodity
  • Oil Shipping
  • Tags
  • United States
  • Topic
  • War in Ukraine

Diesel importers in Brazil are grappling with uncertainty after Russia's announcement on Sept. 21 that it was temporarily banning exports of diesel and gasoline to ease domestic fuel prices and alleviate supply shortages.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

In recent months, Russian product has accounted for about 78% of diesel imports into Brazil, data from S&P Global Commodities at Sea showed. With the export ban Brazil will now be looking to source its supply from elsewhere, market sources said.

Platts, part of S&P Global Commodity Insights, on Sept. 1 launched a spread between all-origin diesel delivered into Brazil versus US origin, starting at a 16-cent discount for the cheaper Russian barrels. The spread was assessed down 14 points at 9.28 cents/gal on Sept. 21.

"We heard Brazil was already buying more out of the US Gulf Coast since Russia had reduced their exports before the ban," one market source said.

Shipping data from Kpler showed flows of refined product cargoes out of Russia had dropped in September compared to August. In August Russia exported 6.32 million barrels of clean products to Brazil, compared to 3.75 million barrels scheduled to arrive in September and 260,000 barrels in October, Kpler data showed.

The data also showed that USGC exports to Brazil totaled 3 million barrels in August, with that figure increasing to 4.80 million barrels in September. So far, 680,000 barrels are scheduled for export to Brazil in October, according to Kpler data.

Platts Global Oil Markets Podcasts on Spotify Platts Global Oil Markets Podcasts on Apple Podcasts Platts Global Oil Markets Podcasts on Google Podcasts

S&P Global analysts said the Russian export ban will open doors for higher USGC exports and prices, as it remains the most reliable supplier to South America.

Market sources were concerned whether deals already made to buy diesel from Russian refiners would be completed. Some sources said cargoes already on the water were likely to still arrive in Brazil, but it was unclear as of Sept. 21 if cargoes secured, but not yet loaded in Russia, would go through.

"It's a possibility due to the ministry's announcement," another market source added, referring to the temporary ban on diesel and gasoline exports announced by the energy ministry.

Russia's government said that the restrictions are intended to relieve internal supply shortages and the resulting soaring prices.

"Temporary restrictions will help saturate the fuel market, which in turn will reduce prices for consumers," the Russian government said in a statement.

S&P Global analysts noted recent shortages at service stations in Russia, while farmers have also been facing diesel shortage ahead of the harvest season.

"Russia definitely produces enough fuel to cover domestic demand," one S&P Global analyst said. "The fundamental problem, however, is that export sales are more profitable than domestic sales."

Another S&P Global analyst pointed to political motivations rather than supply issues within Russia as the reason for the temporary export ban.