Marcos Mortari: Russian diesel has made a strong comeback in Brazil at the start of 2026. But is this renewed dominance here to stay? And what trends should we expect going forward? I am Marcos Mortari, from Argus Brazil Motor Fuels publication, and my guest today on the “Market Talks” podcast is Amance Boutin, Business Development Manager at Argus, who’s been following clean fuels markets in Brazil for many years. Amance, welcome to the podcast!
Amance Boutin: Hi, Marcos. Thank you for having me.
MM: You’ve closely followed development of Brazil’s diesel market over the past years. One of the most striking moments is related to the growing presence of Russian diesel in Brazilian imports, following the start of the conflict with Ukraine in 2022, and the tightening sanctions imposed by the United States, the European Union, and the UK on Moscow. What’s your view on the market these days? And what can recent history teach us about what lies ahead?
AB: OK, Marcos. So, what I've observed in the past eight years I've been following this market is that Brazilian importers basically always strive to find a balance between three factors when pondering the need to bring in volumes of diesel, usually to compensate for domestic production, which amounts to, give or take, 80pc of the Brazilian demand. The first thing has to do with prices. They tend to ask: which is the most competitive source? And how does it compare with the price offered by Petrobras today? Is it cheaper than the domestic product or more expensive? What can I expect in terms of prices and product supply in the coming weeks? So, it's really a tactical and dynamic view with a short-term horizon, and usually you're looking through a two-month window considering this point. Now the second point, which actually I already brought up, is the issue of supply warranty, which somewhat kind of balances the first issue of price that are brought up and it has more to do with the long-term vision and the company strategy. So a question would be: how much can I stretch my supply between one supplier and another? I can reduce my supply with Petrobras for instance. Now we know that Petrobras has the most expensive barrel of diesel in Brazil compared with import cargoes, but what about tomorrow? So Russian diesel today is much cheaper than Petrobras, or US Gulf Coast. But if I'm thinking over the long term, maybe it's better for me to, you know, try to secure and cultivate my commercial relationship with my supplier in the US Gulf Coast. Well, because they are, all in all, my closest suppliers in geographic terms and also I know that they are better positioned on ensuring a continuous flow of products over the long run. Then the third point is the issue of the risk induced by every region. But I think that your vision is more up to date than mine. Given that you're constantly in conversation with traders, Marcos.
MM: Russian flows to Brazil went through a tough winter in the final quarter of 2025, starting with scheduled maintenances at key refineries, a seasonal increase in Turkish demand, and followed by a series of Ukrainian drone attacks on the county’s infrastructure. The escalation of the conflict prompted shutdowns in many Russian refineries, sharply reducing local output and curbing exports to countries such as Brazil. Since December 2025, however, production has picked up as several maintenance programs in Russia were completed, and offers to Brazil regained momentum. Discounts widened compared with cargoes from other origins, such as the US Gulf Coast, and importers once again turned their attention to Russia. Lately, we’ve even heard reports of large Brazilian distributors reselling cargoes they had purchased from the US to take advantage of steeper discounts on Russian product.
AB: Well, that is very interesting, Marcos, to see how Russian barrels came back to the market. Do you believe we’re back to the market conditions seen from 2023 through mid-2025? And if so, how do you see the role of sanctioned cargoes will play in shaping the Brazilian market?
MM: Well, I would say the continuation of this scenario will depend directly on the behavior of other key variables. These include production levels at Russian refineries, domestic demand, export volumes, price dynamics, and the stance taken by Moscow’s major trading partners, such as Turkey. The emergence of new sanctions, along with stricter enforcement of those restrictions already in place, is also expected to play a significant role in shaping the future of Russian diesel flows to Brazil. The progress of negotiations around a potential peace agreement between Russia and Ukraine will be another critical factor. At the moment, large fuel distributors, for compliance reasons, are steering clear of cargoes they believe may be linked to any type of sanction. They fear that an increase in sanctioned cargo flows — often handled by regional competitors or even some refiners — could distort the market and create competitive advantages for those able to access these supplies. By the way: looking ahead, what do you see as the main drivers for Brazil’s diesel market in 2026? What’s on your radar for this year?
AB: It's very interesting looking. We've put the magnifying glass on the Brazilian market. Now if we're looking at the market as a whole on a global level, I think that the conundrum we've seen developing in 2025, it will continue and maybe intensify. We have, you know, on one hand, an exacerbated geopolitical risk and this tends to create strong day-to-day volatility and sudden price hikes. And on the other hand, we have the fundamentals, you know, the relationship between supply and demand, which eventually over the long term prevail and they point to pressured prices. And we've seen during the turn of the year that this geopolitical risk has increased in a worrying way. So now you know, looking at all these factors, this geopolitical risk, obviously the main geopolitical event that hit us home in Brazil, in the energy market is Venezuela. So, although it does not have the short-term repercussions for us in the oil products market, the capture of Nicolas Maduro by the United States does change the equation in the medium-long term. And there are a couple of outstanding questions to be answered. So, for instance, will the American majors accept this challenge thrown at them by Donald Trump? Will they direct their dollars in rebuilding the oil industry, which could take 5, 10, 15 years considering the current scenario of energy transitionby China and less availability of cash in the US to drill new wells in the current pricing scenario — we have, like, below $60/b prices. But you know, looking at a more macro level in terms of geopolitics, we have big questions that arise in the global order such as the relationship between Europe and the United States, and even the existence of NATO, which is a pillar of the world order since the Second World War. In conclusion, I think we are still having a lot of noise and this noise will greatly affect prices on a daily basis. And, you know, looking at the more supply and demand fundamentals picture, we have OPEC production growing at this scenario, which clashes with a picture of demand that no longer seems to find a growth engine in Chinese oil consumption. So I think this is going to be the two main drivers pointing down the big outlook for 2026, in my view.
MM: That's really interesting. Thank you for sharing your insights with us on “Market Talks” podcast. Special thanks to our listeners. See you next time!
