Brazilian crude exports to the US could come to a halt if pending 50pc US tariffs on Brazil's imports include oil, increasing costs for Brazilian grades by more than $30/bl.
Brazil exported around 189,000 b/d of crude — or 11pc of total exports — to the US in the first quarter of 2025, making it the third largest export market. This is far behind China (654,000 b/d, 38pc) and Europe (446,000 b/d, 26pc), according to data from ship-tracking firm Vortexa and global trading analytics platform Kpler.
US president Donald Trump threatened the 50pc tariffs earlier this month for what he called the unfair criminal prosecution of former Brazilian president Jair Bolsonaro for an attempted coup. So far there are no public signs of progress in negotiations between the two countries, and no indication if crude and other energy products will be excluded from tariffs, as they have been in other new US import tariff regimes.
The US imported mostly medium sour Sapinhoa (20.8pc) and heavy sour Peregrino (18.9pc) grades in the first quarter of 2025. Bigger streams such as Tupi (16.3pc) and Mero (9.6pc) figure only as the third and fourth most-imported grades, respectively, according to Vortexa.
Tupi and Buzios fob values are currently estimated at around $70/bl, considering a netback calculation from delivered Argus' assessments and the level of North Sea Dated on 23 July. With 50pc tariffs, those prices would rise to $105/bl for both grades, roughly a $35/bl increase.
Brazil's biggest oil producer, state-controlled Petrobras, has relatively little direct exposure to possible US tariffs. The company sent only 4pc of its crude exports to the US in the first quarter of this year, according to the company's earnings report. But other producers could be more directly affected.
Brazilian independent Prio, for instance, produced around 38,000 b/d of Peregrino crude in the first quarter, making it the second most produced grade out of its 109,300 b/d crude portfolio. The US imported around 34,500 b/d of Peregrino in the first quarter, according to Vortexa data.
Prio announced the purchase of Equinor's 60pc stake in the Peregrino field in May to become its sole operator. Around 30pc of all Peregrino grade exports headed to the US in the first quarter of 2025, only behind Spain, which received around 50pc, according to Vortexa data.
About 37pc of all Sapinhoa crude exports went to the US in the first quarter of this year, just behind China's 50pc. The field is operated by multiple companies, including Petrobras with a 45pc stake, Shell and Repsol-Sinopec with 30pc and 25pc stakes, respectively.
Influence in Asia-Pacific, Europe
Should the US tariffs apply to Brazilian crude, those volumes would likely be reallocated toward Asia-Pacific and European markets, increasing exports to both destinations by 180,000-200,000 b/d, considering current export flows according to Vortexa and Kpler data.
Even with the US volumes representing a small fraction of the total exports, it could still affect both markets, especially considering the peak summer demand period is ending shortly in the northern hemisphere.
Medium grades, including Brazilian Buzios, have seen their premiums versus the Dated benchmark soften in the past few weeks, partially because of peak summer demand nearing its end and European refineries preparing to go into fall turnarounds.
The movement would also come as the Opec+ group has continually increased its output in the past few months as production cuts are unwound, bringing essentially more heavy and medium barrels to the global market.
