Russia beats Brazil in oil exports to India and China

Brazil exported less oil to India and China in the first half of 2022, amid the Ukraine war and an increase in oil exports from Russia to the two Asian countries. According to data from Brazil’s Foreign Trade Secretariat (Secex), until June this year, the South American giant exported 36% less oil to China than in the same period last year. Exports to India fell by 53.8%.

From January to June 2022, Brazil exported around 1.2 million tonnes of oil to India. In the same period, in 2021, there were 2.6 million tonnes. About 12.5 million tonnes of oil were exported to China in the first half of this year, while in 2021, about 19.56 million tonnes were shipped in the same period.

In dollars, oil exports to India fell from around US$1.09 billion to US$589 million (down 46%). Regarding China, exports went from US$ 8.06 billion last year to US$ 7.9 billion in 2022 (-2%).

Amid the war in Ukraine and sanctions imposed on Russian oil by the United States and the European Union, China and India, the two most populous countries in the world, have become more important markets for Russia in the oil trade.

In a kind of “parallel market,” Russia offers oil at lower prices than those practiced in the international arena, explains Roberto Dumas, professor of international economics at Insper and chief strategist at investment bank Voiter.

China’s oil purchase from Russia is also a way of showing their alliances, interprets Duma. “It’s an advantageous alliance for China; it buys oil from the country at a discounted price and then resells it at a market price,” he explains.

Thus, the price of Russian oil is more attractive than that of Brazil, which has experienced a reduction in its export numbers. According to Dumas, the tendency is for Brazilian exports to remain lower while sanctions on Russia’s natural gas and oil last.

The professor also believes that the United States turns a “blind eye” to the situation to prevent prices from booming. “Without Russian oil, the barrel would have gone to around US$160,” estimates Dumas.

Despite the sanctions in place, during the first 100 days of the war, Russia earned €93 billion from its fossil fuel exports, with about two-thirds of those gains coming from oil. During the period, China was Russia’s biggest importer of fossil fuels, and Indians increased their product imports, buying about 18% of the country’s exports.

In May, Russia overtook Saudi Arabia as China’s top oil supplier, according to data released by the Chinese government, after imports of Russian oil hit a record high of 28% from the previous month. According to freight data analyzed in June by Kpler, a market research firm, India currently imports more than 760,000 barrels daily from the Russians.

Source: Estadão

To read the full original article, please go to: https://www.estadao.com.br/economia/brasil-perde-espaco-para-a-russia-na-exportacao-de-petroleo-para-india-e-china/

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