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Brazil’s central bank cuts target rate to 14.25pc
Brazil’s central bank cuts target rate to 14.25pc
Sao Paulo, 17 June (Argus) — Brazil's central bank lowered its target rate by a quarter point to 14.25pc today in its fourth meeting of 2026, while ongoing uncertainty over the Mideast Gulf war continues to weigh on the outlook. The decision to lower the rate, announced on Wednesday, followed similar 0.25pc cuts in March and April . Domestically, economic activity appears to be recovering from the previous quarter, and the labor market shows signs of resilience, the central bank's monetary committee Copom said. Despite inflation risks continuing to be higher than usual, the committee decided to maintain its cutting trajectory, it said. In the US, Federal Reserve policymakers kept the target rate unchanged Wednesday for a fourth meeting this year while penciling in a possible rate hike by the end of the year. Brazil's headline inflation accelerated to an annual 4.72pc in May . Inflation expectations, as calculated by the bank's Focus survey, remain above target at 5.3pc for 2026 and 4.1pc for 2027. Economic growth slowed to an annual 1.8pc in the first quarter, according to official statistics agency data. For full-year 2025, GDP growth slowed to 2.3pc from 3.4pc in 2024 By João Curi Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Iranian oil likely to return to mainstream fleet
Iranian oil likely to return to mainstream fleet
New York, 17 June (Argus) — The non-sanctioned crude tanker market could see a surge in demand if the pending peace deal between the US and Iran lifts penalties that have weighed on Iranian oil for years, according to shipowners at the Marine Money Conference in New York this week. Iranian crude is commonly transported on "shadow fleet" vessels, older, poorly insured ships that are used to bypass western sanctions to transport sanctioned crude to global markets. The draft of the 14-point memorandum between the US and Iran, leaked yesterday, included the lifting of western sanctions and the issuance of waivers for exports of Iranian crude , petrochemical products and their derivatives, and all related services, including banking, insurance and transportation. "Part of the agreement is that Iranian oil comes back into the fold, and that would certainly mean, over time, this oil will be transported on (mainstream) vessels," Capital Tankers chief executive Jerry Kalogiratos told the conference. Once Iranian oil is treated the same as other non-sanctioned crude, there will be no incentive for importers to use the "sub-standard ships", he said. Iranian oil that may be relieved of sanctions under the US-Iran agreement is a completely "new barrel" to the compliant fleet, shipowner Frontline's chief executive Lars Barstad said on the panel. Heightened demand for Iranian crude transported on mainstream fleet tankers could help support rates for crude tankers. The US Office of Foreign Assets Control's (OFAC) issuance of a general license on Venezuelan crude earlier this year — after the US captured the country's president and the subsequent increase in Venezuelan exports carried by compliant ships — has had a similar supportive effect on crude rates out of the US Gulf coast . "It's an exceptional deal for Iran," said OFAC's former head of policy Stephanie Connor at the same conference. Before the US-Iran conflict, China's independent refining industry was one of the main importers of Iranian crude, despite the US sanctions. With the issuance of a general license on Iranian export, countries that were sanctioned by the US would be incentivized to buy Iranian crude . "If OFAC issues a general license on Friday, that's great, for some people," Connor said. "Mostly US adversaries who are already trading in Iran, despite US sanctions." By Delfina Marchese and Charlotte Bawol Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Brazilian ethanol flows start slow under EU-Mercosur
Brazilian ethanol flows start slow under EU-Mercosur
London, 17 June (Argus) — Ethanol exports from Brazil to the EU under the interim Trade Agreement (iTA) with the Mercosur trade bloc, which began on 1 May, have been sluggish so far, as a result of confusion around quota management, difficulties with export licences and uncertainties about the tracking of imported ethanol's final application. Brazil, the Mercosur's largest ethanol producer with a nameplate capacity of more than 77mn t/yr, exported 7,277m³ — approximately 5,780t — of ethanol to EU countries in May, the lowest volume since March 2025, according to Brazilian trade ministry Mdic data. Mercosur is a trade bloc including Brazil, Argentina, Uruguay and Paraguay as permanent members. Increased freight costs as a result of the Iran-US war as well as lower availability of product at the beginning of the 2026-27 sugarcane crop, which spans from 1 April 2026-31 March 2027, weighed on exports. But caution over the EU-Mercosur trade agreement also played a role in diminishing Brazilian ethanol exports to Europe. Many producers and exporters are struggling to access the quotas, and others are waiting to see how practical terms of the deal will unravel. None of the cargoes from Brazil in May have arrived in Europe under the iTA quota, according to market participants. Legal limit Under the EU's implementation regulation, import quotas from Mercosur suppliers are managed under licences and not on a first-come-first-served basis, as some market participants previously assumed. This assumption created some hesitation, with a market participant pointing out that if a cargo was delayed it would run the risk of arriving after the quota had been already allocated, meaning that it would not benefit from the lower or zero tariffs under the quota and incur the maximum Most Favoured Nation (MFN) duty of €192/m³ for undenatured ethanol and €102/m³ for denatured ethanol. Bureaucracy surrounding the licences to benefit from reduced tariffs is also weighing on exports from Brazil. Brazilian producers are struggling with the paperwork needed to export with tariff exemption. Some have even reportedly been denied access, because the Brazilian government only grants the licence to producers and exporters of sugarcane-based ethanol from the north or northeast of the country. Brazil's trade ministry Mdic confirmed to Argus that ethanol from other regions and sources, such as corn, will face no such restrictions. Up until the end of 2026, only a small amount of imported ethanol from Mercosur suppliers will be able to profit from the lower or zero tariffs. This is because the iTA allows for imports of up to 650,000t/yr of Mercosur-origin ethanol, phased in across five years. In 2026, duty-free ethanol imports of only 90,000t are permitted for chemical use and only 40,000t for other purposes, including fuel blending, at an in-quota tariff rate equalling a third of the standard MFN duty. The quotas for this year could be quickly met, considering an IMO2 coated medium range tanker can carry up to 40,000t of ethanol, while a standard stainless steel vessel can carry up to around 18,500t. Smaller chemical tankers frequently carry ethanol too. The EU imported over 60,500t of undenatured ethanol from the Mercosur region in 2025, with more than 72pc of this coming from Brazil, according to Eurostat data. Alcohol misuse Market participants have also voiced uncertainty in relation to how the European Commission will track which industry the imported ethanol will ultimately end up in. Several told Argus that they question what will happen if ethanol imported for the chemical sector ends being used for a different purpose. Under Annex 2-A of the iTA the EU can subject imports to an End-Use Procedure , to conduct the relevant customs checks on the imports' declared use, and that can be applied ethanol imports to ensure their final application. The EU's Union Customs Code (UCC) outlines that to obtain authorisation for this procedure an applicant must have a registered office in the EU customs territory, provide the necessary assurance that the operations using these goods will be properly implemented and provide a guarantee. If end-use conditions are then breached under general EU customs law, a customs debt is incurred, and the importer must pay the difference, plus interest on arrears. Member states set financial penalties for misdeclaration under national law. By Toby Shay and Maria Ligia Barros Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Asia, Europe drive Brazil's ethanol demand: Panel
Asia, Europe drive Brazil's ethanol demand: Panel
Sao Paulo, 16 June (Argus) — Asian and European markets have been driving increasing demand for Brazilian ethanol, including for new market opportunities beyond road fuels, panelists said at the Argus Biofuels and Feedstocks Latin America conference in Sao Paulo on Tuesday. Global demand for ethanol from top biofuel producers Brazil and the US has grown on rising blend mandates in Asian countries such as Vietnam and India and higher fuel supply risks because of the war in the Middle East, Brazilian corn ethanol producer FS' commercial director Paulo da Cunha said. While US ethanol mostly heads to Asia and UK, there is a growing demand for Latin American — especially Brazilian — ethanol in Europe that could rise even more thanks to the recently adopted Mercosur-EU free trade agreement , Paraguayan corn ethanol firm Inpasa's trading director Renato Zicardi said. Brazil's domestic market isinvesting to supply sectors other than road transport, including the alcohol-to-jet route for sustainable aviation fuel and ethanol-fueled vessels, Cunha said. The International Maritime Organization has approved a corn-ethanol route for maritime transport, Zicardi said. Corn- and sugarcane-based ethanol complement each other and are not competitors, further supporting demand, Cunha said. The maturity and diversity of financing sources in Brazil for ethanol projects should help the sector develop in coming years without major hurdles, Spain-based bank Santander's project finance director Marcelo Sahatdjian said. By João Curi Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.