Brazil loses ground to Russia in oil exports to India and China

Brazil exported less Petroleum to the India and for the China in the first half of 2022, amid the Ukraine war and an increase in Russian oil imports by the two Asian countries. According to data from the Foreign Trade Secretariat (Secex), until June this year, Brazil exported 36% less oil to China than in the same period last year. Exports to India fell by 53.8%.

From January to June 2022, Brazil exported around 1.2 million tons of oil to India. In the same period in 2021, there were 2.6 million tons. About 12.5 million tons of oil were exported to China in the first half of this year, while in 2021, in the same period, about 19.56 million tons were exported.

Brazil exported less oil to India and China in the first half of 2022 than in the same period of the previous year.
Brazil exported less oil to India and China in the first half of 2022 than in the same period of the previous year. Photograph: Fabio Motta/Estadão

Continues after advertising

Continues after advertising

Amid war in ukraine and the sanctions imposed on Russian oil by the United States and the European Union, China and India, the two most populous countries in the world, have become even more important markets for the Russia in the oil trade.

In a kind of “parallel market”, Russia offers oil at lower prices than those practiced on the international market, explains Roberto Dumas, professor of international economics at Insper and chief strategist at investment bank Voiter.

China’s purchase of oil from Russia is also a way of showing a “certain alliance”, interprets Dumas. “It’s an advantageous alliance for China, it ends up buying oil from the country at a discounted price and then resells it at a market price,” he explains.

In this way, the price of Russian oil is more attractive than that of Brazil, which has been suffering from a reduction in its exports. According to Dumas, the tendency is for Brazilian exports to remain lower while sanctions on Russian natural gas and oil last.

The professor also believes that the United States turns a “blind eye” to the situation, in an attempt to prevent a price explosion. “Without Russian oil, the barrel would have gone to around US$160”, estimates Dumas.

Even with the sanctions, During the first 100 days of the war Russia earned 93 billion euros from its fossil fuel exports, with about two-thirds of those gains coming from oil. During the period, China was the biggest importer of fossil fuels, and Indians increased their imports of Russian oil, buying about 18% of the country’s exports.

In May, Russia overtook Saudi Arabia as China’s top oil supplier, according to data released by the Chinese government, after Chinese imports of Russian oil hit a record high of 28% from the previous month. Second freight data analyzed in June by Kplera market research firm, India currently imports more than 760,000 barrels daily from the Russians.

About Yadunandan Singh

Born in 1992, Yadunandan approaches the world of video games thanks to two sacred monsters like Diablo and above all Sonic, strictly in the Sega Saturn version. Ranging between consoles and PCs, he is particularly fond of platform titles and RPGs, not disdaining all other genres and moving in the constant search for the perfect balance between narration and interactivity.

Check Also

INCOME TAX: See the list of situations in which it is possible to obtain EXEMPTION

Did you know that some situations exempt the citizen from declaring the Income tax? Many …