Foreign sales of oil from Brazil hit a record high in March, just as a government-announced export tax on the commodity suddenly went into effect, with oil companies having no leeway to reposition shipments, government data pointed out. and specialists.
In this month’s cumulative result to the 24th, the volume of oil exported by Brazil totaled 9.4 million tons, up 75.4% from March 2022, according to the Foreign Trade Secretariat (Secex), which should contribute to an increase in the collection of the Union.
The increase comes after months of oil production in Brazil at its highest levels on record, while demand from Brazilian refineries was weak, at least in January, according to official data.
The new tax on exported oil, of 9.2% and lasting for four months, was announced by the government on 28 February, one day before it starts to be applied on 1 March, to compensate for the union’s decision to maintain a fuel tax exemption.
The tax was established with a provisional measure and has been questioned by oil companies, specialists and political parties, who have also appealed to the Federal Court (STF) to challenge it.
“Despite having this extra tax on exports, there were already contracts (for exports), the timetable for ‘lifts’ (withdrawals of oil by oil companies on the high seas) had already been agreed for each field, there is no It was a way to change that.” Marcelo de Assis, director of exploration and production research at Wood Mackenzie, told Reuters.
In large Brazilian offshore fields, where there are oil companies in addition to Petrobras, it is customary for the concessionaires to take turns removing the oil to which they are entitled to the high seas each time the tanks on the platforms of the asset in question are filled up. This schedule is agreed in advance, which, given the new tax, could indicate that one oil company has been hit harder than another by the export tax at this time.
“When you agree on the lifting schedule, you agree on the shipowners – the vessels that will be doing the ‘lifting’ – and you close the end with the buyers. It’s not something you can have flexibility to keep on a national market.”
Assis also pointed out that “February is a short month” and that it’s possible that some shipments went into March, contributing to the record.
In a note to Reuters, the Brazilian Petroleum Institute (IBP), which represents oil companies in Brazil, said this month’s result was also influenced by a much lower level of vessels in February, when the country exported about 2.5 million tons, the lowest volume for the month since 2015.
According to data cited by the IBP, the previous record for oil exports from Brazil was achieved in December 2019, with 8.5 million tons.
The total volume of oil exported from Brazil in March will be published by Secex on Monday.
In the first quarter, exports increased by 15% compared to the same period in 2022, considering the partial data for March, according to the IBP, which avoided explaining in more detail the reasons for the increase in exports.
Petrobras, the country’s largest oil producer and refiner, in turn, declined a request for comment.
PRODUCTION AND DEMAND BALANCE
An oil company source pointed out, however, that the volume of exports only follows the balance between production and demand from refineries in Brazil, which is the natural consumer. “If there are some refineries under maintenance, or the demand for derivatives is low, domestic oil consumption drops, leaving more to export. If there is an increase in oil production, ditto,” he said.
Petrobras has previously communicated that the largest maintenance stop ever carried out at the Presidente Bernardes de Cubatão Refinery (RPBC), in São Paulo, will begin on March 10, lasting 60 days and investments totaling 720 million reais.
Oil production in Brazil broke a record in January and had the second-highest volume in February, according to the most recent data released by regulator ANP. March data is not yet available. Refinery processing information for February and March has not yet been released.
StoneX’s Market Intelligence analyst, Bruno Cordeiro, deemed it necessary to wait for more updated data on oil production and refinery consumption. But he pointed out that there may have been something similar to what was recorded in the first month of the year.
“There was a surplus of oil available for export in January…production grew by 8% compared to January 2022, while domestic consumption (of oil from refineries) decreased by 13.4%” , he has declared.
“Perhaps we will have a similar scenario for March… it may be that production has continued to warm up, while consumption by refineries has not retaliated, creating this exportable surplus.”
When contacted, regulator ANP said it would not comment on the report, since it did not yet have consolidated data from Secex for March.
Source: Terra
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