Brazil overtakes Turkey as largest buyer of Russian diesel

By Uriel Araujo

According to Financial Times, Brazilian imports of diesel from Russia last year skyrocketed, with a staggering 4,600 per cent increase pertaining to total value - from $95 million worth of diesel purchases in 2022 to $4.5 billion. Purchases of fuel oil in turn rose by about 400 per cent. This amounts to a $8.6bn “boost” to the Russian economy, Brazil being the largest Latin American market. In October last year, the South American nation in fact became the largest buyer of Russian diesel, overtaking Turkey.

By August 2023, Brazil had already become Russia’s second largest buyer of diesel worldwide, only surpassed by Turkey, thus making Russia overtake the US in Brazilian diesel imports: In July 2023, American diesel sales to the Latin American country totaled $203.7 million, surpassed by Russian ones ($240.7 million). In June, the Slavic country also started supplying gasoline to Brazil.

Russia is not a traditional oil trader to Brazil, but since the European Union (EU) embargo on Russia’s oil products, the Russian Federation redirected the sale of its products - Brazil, China and India (three large BRICS nations) going up in the rankings. In order to compete in new markets, Russian fuel prices went down. The US has been unable to halt the flow of Russian refined products because of concerns about a price spike, considering the Eurasian country’s large market presence.

Diesel is really crucial for the Brazilian agribusiness and transportation sectors, the country’s cargo transport system being heavily dependent on trucks. Getting “discount” barrels has been a “financial boon” to Brazil, says Viktor Katona, the main crude oil analyst at Kpler energy analytics firm. The abrupt increase took place during Brazilian President Luis Inacio “Lula” da Silva first year in office - Lula, as he prefers to be called, held the office of President before, for two terms in a row (2003-2010), and he has been keen on preserving commercial and political ties with Moscow.

Brazil now gets Russian fertilizers at a discount, as well. During the first semester of 2022, price averages of intermediary fertilizers had soared, however the supply normalized by the end of the same year, with prices going back to the 2021 levels. The South American country is a major exporter of livestock and agriculture commodities, being the world’s third largest country by agricultural yield. It imports 80% of the fertilizers it uses (including phosphates and nitrogen) and, in 2021, relied on Russia for about a quarter of all imported fertilizers.

Nowadays it is increasingly hard to insulate industries and trade from geopolitical disputes, with sharp Western pressures for “alignmentism”. A large part of the Global South however has been benefiting from diversified partnerships and cooperation, and has therefore been speaking a quite different language, one that the West does not seem to fully grasp thus far: that of non-alignment and multi-alignment. According to Republic of Congo MP Jeremy Lissouba, Western “superpowers wish for nations of Africa and Asia to pick a side”. These nations, however, as well as Latin American countries, do not necessarily see the point of doing so.

Brazil has been a major target of such pressures: in January 2023, for example, German chancellor Olaf Scholz urged Lula to send tank shells to Ukraine, to which the latter replied that “Brazil has no interest in passing on ammunition so that it will be used in the war.”

The Russian-Ukrainian conflict that has been unfolding since 2022 is a direct escalation of the 2014 Ukrainian crisis and has largely been fueled by NATO’s expansion (which is part of the Alliance’s policy of “encircling” Russia) and by the West’s support of the Ukrainian Maidan. Many leaders in the Global South, notwithstanding any criticism they may have of the current Russian military campaign in Ukraine, see the issue thusly and, on top of that, realpolitik considerations regarding trade make Western hypocrisy and its claims for “alignmentism” harder to swallow.

Therefore, one should not make too much of Lula’s denouncing what he described as “violation of Ukraine's territorial integrity” last year. From a Brazilian perspective, this is about upholding some “pragmatic pacifism” principles of its diplomacy, while positioning the country as “neutral”, in a balancing act. Lula has also criticized Kyiv and Washington, and after the International Criminal Court (ICC) issued a controversial arrest warrant for Russian President Vladimir Putin, the Brazilian leader downplayed the relevance of the ICC court (in which he is not alone). The aforementioned consistent Brazilian diplomatic tradition of pragmatic pacifism also helps explain why there has not been any major foreign policy change from Jair Bolsonaro’ last years in office to the incumbent president.

Moreover, since 2008, Moscow and Brasilia have had a technical-military cooperation agreement about the production and exchange of military technology, which is potentially advantageous to Brazil, according to Cristina Pecequilo, an international relations professor at the Federal University of São Paulo (Unifesp). The agreement was ratified in 2015. The Brazilian Congress’ Foreign Relations Committee has been criticized for meeting with Vladimir Putin in September last year to debate the regulation of it. However, Brazil also has technical-military cooperation agreements with Paris and Washington and defense-related deals with several other countries. And, in spite of Western pressure, one should not expect it to cease to cooperate with Moscow when it deems beneficial to its national interest to do so.

Source: InfoBrics