Sanctions do not deter sharp rise in Brazil’s diesel imports from Russia

In 2023, Brazil imported $5.3 billion worth of fuel oils from Russia, marking a staggering 375% increase compared to purchases made in 2022. This January, the surge compared to the same period last year was even more significant, at 462%. These figures propelled Russia to become the leading exporter of the product to Brazil, surpassing the United States.

Shortly after the release of January’s trade balance data, the United States, the European Union, and the United Kingdom imposed new trade sanctions against Russia following the death of Alexei Navalny, President Vladimir Putin’s leading opponent and critic.

The United States and the United Kingdom banned the sale of Russian oil and natural gas, while the European Union decided to embargo crude oil imports by sea. Notably absent from these retaliatory measures were embargoes on exports of fuel oils.

According to oil market experts, there has been no indication thus far from the United States and the European Union regarding flows of petroleum derivatives, and it is unlikely that Western powers will pressure Brazil to halt its imports of diesel oil from Russia.

These experts predict that Russian diesel imports by Brazil will continue in 2024. In January, purchases totaled $500 million, a 462% increase compared to imports made in the same month last year, with the product accounting for 66% of all Russian sales to Brazil.

While projecting annual results from just one month’s data is premature, January’s figures indicate a strong upward trend that persisted throughout last year.

The significant increase in fuel oil purchases was the primary driver behind the $8.669 billion deficit recorded in Brazil’s trade balance with Vladimir Putin’s country in 2023. This placed Russia in fifth position among Brazil’s largest trading partners, behind only China, the United States, Germany, and Argentina.

Last year, Brazilian exports to the Russian market experienced a 3.41% decline, totaling $1.343 billion, with Russia ranking a modest 42nd among Brazil’s top markets for exports.

In contrast, Russian sales grew by 27.5%, reaching $10.013 billion. The total trade flow (exports + imports) amounted to $11.356 billion, marking one of the highest bilateral trade figures since the start of historical records in 1989 and positioning Russia as Brazil’s fifth-largest market.

Source: Comex do Brasil

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