U.S. diesel export ban would hit Brazil—and hurt the U.S.

A U.S. ban on diesel exports would hit Brazil particularly hard because the country has become heavily reliant on American supplies, while potentially hurting U.S. refiners themselves. Measured in barrels per day, Brazil was the largest buyer of U.S. diesel and gasoline through mid-September, ahead of countries including Mexico, Chile, the United Kingdom and the Netherlands, according to data from commodity analytics platform Vortexa.

Official U.S. government data, measured in dollar terms through July and covering diesel alone, put Brazil third behind the Netherlands and Mexico. U.S. diesel sales to Brazil totaled $2.9 billion in the period, the highest level since 2022, when they reached $4.6 billion following Russia’s invasion of Ukraine.

As it did after the war in Eastern Europe began, Brazil has again shifted from Russian to U.S. diesel this year. The United States accounted for 36% of Brazil’s diesel imports in January, a share that fell to 1% in March before climbing steadily to 73% in August. Russia, meanwhile, supplied 90% of Brazil’s imported diesel in April but only 4% in August.

Since July, amid Russia’s export restrictions and ongoing refinery disruptions, Brazil has redirected some purchases to other suppliers.

“Last year, Brazil imported more than 60% of its diesel from Russia; currently, about 40% comes from that source. On a monthly basis, Russia’s share has recently fallen well below that level, with the U.S. accounting for more than 70% of diesel imports in August,” the bank said.

U.S. export ban could backfire

According to Oxford Economics, countries and international companies would need time to find alternatives to U.S. diesel. The main options are refineries in India and other Asian countries, which also face constraints on crude oil imports.

Brazil has already begun making that shift. Indian diesel, which had accounted for virtually none of the country’s imports during most of the year, jumped to 20% of total purchases in August.

Shipping times and costs, however, are higher. Deliveries from the United States to Latin America typically take one to two weeks, Oxford said. Shipments from Asia take nearly a month to arrive.

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