Brazilian loadings bound for Europe have been kicking higher so far this year. While flows to Northwest Europe have been considerably stronger since October, loadings to Southern European countries moved higher in January.
China remains by far the most popular destination for Brazilian crude. Europe, meanwhile, has become the battleground in the global oil price war as Russia and Saudi Arabia try to gain bigger market shares. Brazil, for its part, is also trying to increase its presence, though current market conditions will not benefit the South American country.
Brazilian upstream costs at its pre-salt oil fields are considerably steep, putting the profitability of those projects into question under the current oil prices. Also, new developments in the country’s prolific Santos Basin will likely be put on hold until there is greater clarity surrounding the current geopolitical and economic panorama, given oil prices continue to drop and the coronavirus rips through Europe.
The success of Brazil’s skyrocketing oil production could be put on hold by this crisis.