Russia top supplier of diesel to Brazil, earning USD 818.7 mln in two months

After record-breaking results in Brazilian diesel imports in 2023, Russia remains the leading supplier to the national purchases this year. According to data from the Ministry of Development, Industry, Foreign Trade, and Services (MDIC), Russia has earned USD 818.7 million in diesel sales to Brazil this year.

Brazilian imports of Russian diesel reached $476.8 million in January alone, according to government data. The United States stood as the second-largest supplier, selling $147.5 million in diesel to Brazil in the first month of the year. In February, Brazil purchased $341.9 million worth of Russian diesel. During that month, the United Arab Emirates ranked second, selling $168.3 million to Brazil.

In 2023, Brazil set a record for diesel imports from Russia, totaling 6.1 million tons and amounting to $4.5 billion. By comparison, there were $95 million in Russian diesel imports in 2022.

Due to the conflict between Russia and Ukraine, the European Union and the US imposed sanctions on the sale of Russian fuels, prompting Russia to seek new markets and reduce prices to remain competitive. India and China also stood out as major buyers of Russian products in 2023.

Last year, Russia took measures to control prices, such as temporarily banning the export of diesel and gasoline in September when oil prices approached $100 per barrel. While temporary, this raised global concerns about the instability of Russian supply, which typically does not engage in long-term contracts.

According to Citi, the recent surge in diesel imports over the last three months raises concerns for Brazilian fuel distributors, who have amassed large stocks and may face declining margins. Despite this, the outlook for distributors in 2024 remains positive, with a competitive market environment. However, March is expected to see continued high import volumes.

Currently, diesel prices in Brazil are below international levels. Russian diesel imports remained at a 10% discount compared to diesel imports from the United States in February 2024, according to a Citi report.

It is believed that Brazil slowed its diesel imports in February after large imports in December 2023 and January of this year. This was due to players building up diesel stocks to take advantage of potential tax increases on fuels.

In February, consumer gasoline and diesel prices in Brazil increased due to changes in the rates of the Tax on Circulation of Goods and Services (ICMS- excise tax). Gasoline saw an average increase of R$ 0.15 per liter, while diesel increased by R$ 0.12 per liter.

Source: Valor Econômico
Click here to read the original news report: https://valor.globo.com/empresas/noticia/2024/03/25/russia-lidera-nas-importacoes-de-diesel-pelo-brasil-com-us-8187-milhoes-em-vendas-este-ano.ghtml

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