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Brazilian imports of diesel from Russia last year soared 4,600 per cent while purchases of fuel oil rose by almost 400 per cent, in a $8.6bn boost to the Russian economy as the war in Ukraine enters its third year.
Brasília imported 6.1mn tonnes of diesel from Russia in 2023, a 6,000 per cent increase from the 101,000 tonnes the previous year. The value in dollar terms increased 4,600 per cent from $95mn to $4.5bn, according to official government figures.
The Latin American nation also increased its purchases of fuel oil from Russia, with imports growing to $5.3bn last year from $1.1bn the previous year.
Brazil overtook Turkey in October to become the largest buyer of Russian diesel, according to data from Kpler, while the jump in diesel imports last year means Russia has overtaken the US as Brazil’s largest supplier of the fuel.
Government officials say the sharp increase in purchases — which occurred during leftwing President Luiz Inácio Lula da Silva’s first year back in office — helped to control prices for the consumer.
Asked about the jump in Russian diesel imports, Brazil’s development, industry and foreign trade ministry said foreign trade was “influenced by multiple factors” and that “fuel imports are the result of decisions made by private agents and follow the logic of supply and demand”.
Moscow has been selling crude oil and oil products at discounted rates due to sanctions placed on it by western nations as a result of its full-scale invasion of Ukraine. The purchases by Brazil are allowed under the sanctions regime as long as it complies with a detailed set of regulations on issues such as shipping.
Oliver Stuenkel, professor of international relations at the Getulio Vargas Foundation, said: “The first thing going on is just realpolitik. Brazil has identified an opportunity to obtain Russian commodities at a discount and it is not only diesel, but also fertiliser. The same goes for countries like India.
“[But] at the same time Brazil is keen to preserve its economic and political ties with Russia. Brazil being willing to help out in the midst of this situation [in Ukraine] is part of an implicit dynamic within the Brics, which is they have an all-weather friendship and help each other out in times of difficulty,” he said, referring to the group that also includes Russia, India, China and South Africa.
The minister of mines and energy last year said the ministry “works tirelessly to guarantee the supply of fuel . . . for the country”.
The dramatic rise in imports may fuel accusations that Brazil is sympathetic to Russia in the war.
Although Brasília officially condemned Russia’s invasion, Lula last year repeatedly claimed that Kyiv bears equal responsibility with Moscow for the conflict and has accused Washington of “encouraging” the violence.
After the International Criminal Court issued an arrest warrant for Vladimir Putin, accusing him of war crimes in Ukraine, Lula said the Russian leader would be welcome to attend the G20 summit in Rio de Janeiro this year without the fear of detention. He later backtracked and said it would be an issue for the courts to decide.
In December, Russia accounted for 85 per cent of Brazil’s total diesel imports; the average for 2023 was about 50 per cent.
A top-10 crude producing nation, Brazil relies on diesel imports to fill about 20 per cent of domestic demand. Under Lula, its state-controlled oil major Petrobras is investing to boost refinery capacity.
Felipe Perez, Americas director at S&P Global Commodity Insights, said that, while there might be “some politics” at play, price was the crucial factor driving the diesel imports.
“People will try to find the cheapest diesel. Everything in Brazil depends on diesel. It is not just transport, but the agribusiness sector too,” he said.
The price of diesel has long been a sensitive issue in Brazil, which depends on legions of truckers to keep the economy moving. More than 60 per cent of cargo in the continent-sized nation is transported by truck, compared with 32 per cent in the US.
