For six months Brazil has record increase in imports of Russian fuel from 31.6 thousand to 234.9 thousand barrels per day. Moreover, the Brazilian authorities buy resource from Russia with a good discount. This is written by economists Jameson Herron and Prejula Prem in an article for Bloomberg.
Jameson Herron writes that Brazil began to actively purchase Russian fuel in February after the European Union joined the oil embargo against the Russian Federation. Since the restriction came into effect, the South American state has become the second largest buyer of diesel fuel from Russia in the world, behind only Turkey.
According to economists’ forecasts, Brazil bought 31.6 thousand barrels of fuel from Russia per day in January. Already in the coming month, this figure doubled to 78.5 thousand barrels daily, in May – 191.5 thousand barrels, and in July – 188 thousand barrels. Experts assume that in August the volume of purchases will increase by 25% month-on-month to 234.9 thousand barrels per day.
The oil embargo of the European Union and G7 countries was supposed to reduce the inflow of funds to Russia. However, the sanctions policy of these blocs has also reduced the prices of Russian fuel, which has become attractively competitive in new markets, Bloomberg experts note.
“The price threshold for premium Russian oil products such as diesel is set at $100 per barrel, while the price cap for discounted fuel is $45 per barrel,” Herron emphasises.
Since the international sanctions were imposed, Brazil has been buying Russian fuel at $10-15 per barrel less than before. According to Bloomberg economists, receiving such a resource is a gift. Since the Brazilian government has to constantly struggle with petrol prices.
“Brazil is the largest Latin American market, so Russian refiners are focused on supplying the country,” explained Victor Katona, lead crude analyst at Kpler.
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