Venezuela sanctions pave the way for new Brazilian crude grade shipments to China

Brazil’s new grade of medium heavy crude, known as Buzios, has made its way to China despite its quality issues according to Hellenic Shipping News. China usually buys Lula crude from Brazil, however US sanctions have reduced the supply of competing grades from Venezuela, increasing competition for Lula cargoes from buyers in the US and Europe.

According to S&P Global Platts, Buzios crude is expected to reach China’s Haike Petrochemical and Wudi Xinyue Petrochemical refineries sometime this month. It is the first time Haike Petrochemical is importing Brazilian Buzios, while it is Wudi Xinyue Petrochemical’s second import of the new grade of medium heavy crude oil.

China’s independent refiners favor Brazil’s Lula crude due to its heavy gas-oil yield. The Asian country’s imports of this grade reached around 3.2m tons in the first bimester of 2019, up 71% from 1.877m tons received in the same period last year. Of the total volume of Petrobras’s crude oil exports in 2018, nearly 66% went to China, according to a Petrobras source.

China’s crude imports from Brazil rose 37% to 635,000 b/d in 2018 year-on-year, while the volume surged 56% on the year to 966,000 b/d in January-February 2019, according to data from the General Administration of Customs.

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