Oil becomes Brazil’s top export, challenging Lula’s environmental agenda

Oil has surpassed soybeans as Brazil’s top export, marking a historic milestone that highlights the country’s status as a fossil fuel powerhouse, especially as it prepares to host COP30.

The value of Brazil’s crude oil exports rose by 5%, reaching US$ 44.8 billion in 2024, the first time oil has outpaced all other external sales, according to data released by the Ministry of Commerce on Monday (6). The volume of oil shipments grew by 10%.

The drop in soybean prices and a decrease in sales volumes contributed to the rise of oil to the top spot, according to José Augusto de Castro, executive president of the Brazilian Foreign Trade Association (AEB).

Although soybeans came in behind crude oil and iron ore, Castro expects the oilseed to regain first place this year, with exports forecasted at US$ 49.5 billion.

“With the recovery of the agricultural harvest, it is possible that soybeans will become the top export product again,” said Herlon Brandão, director of statistics at the Ministry of Commerce, during a press conference.

Brazil was the eighth-largest supplier of crude oil globally in 2023, driven by Petrobras. The total production from Brazilian wells averaged about 3.4 million barrels per day last year, according to the Brazilian Petroleum and Gas Institute (IBP).

Since 2016, Brazil’s oil sector foreign trade has consistently shown a positive net balance. The share of oil exported has been steadily increasing since then, accounting for nearly 50% of the total supply by November, according to StoneX.

The IBP forecasts that daily crude oil exports will reach 2.5 million barrels by 2027, driven by the expansion of production and rising external demand for Brazilian oil due to its relatively low carbon footprint. For instance, crude oil from the Tupi and Búzios fields has less than half the carbon intensity of the global average.

“European refineries will seek oil that emits as little CO2 as possible,” said IBP president Roberto Ardenghy in a recent press conference. “We see an increase in the competitiveness of Brazilian product.”

Brazil is aiming to improve its environmental credentials as it prepares to host the United Nations Climate Change Conference, known as COP30, in November.

“European refineries will seek oil that emits as little CO2 as possible,” said IBP president Roberto Ardenghy in a recent press conference. “We see an increase in the competitiveness of Brazilian product.”

Brazil is working to enhance its environmental credentials while preparing to host the United Nations Climate Change Conference, known as COP30, in November.

By Mariana Durao and Beatriz Amat

Source: Bloomberg Linea

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