Brazil exports gasoline, diesel surplus

Brazil is ramping up fuel exports and trimming imports to counter plummeting domestic demand.

State-controlled Petrobras booked at least three vessels this week to export diesel and gasoline to the US Atlantic coast, with options for transatlantic shipment as well, shipping reports show.

The company has placed options on the Elandra Redwood and the Ardmore Sealeader and is looking for a third vessel to ship one gasoline and two diesel cargoes to the US Atlantic coast, with transatlantic options.

These cargoes are the latest in Petrobras' continued attempt to find overseas outlets for its growing fuel surplus.

Up to 2.31mn bl of diesel has loaded out of Brazil so far this month, the highest level in at least three years, according to estimates from oil analytic firm Vortexa. Around 300,000 bl are scheduled to load later this month. Most of these cargoes are headed to Bangladesh, Argentina and Greece.

Up to 1.54mn bl of gasoline has loaded so far this month out of Brazil, with around 500,000 bl scheduled to load by the end of March. These numbers are largely on par with February's six-month high, Vortexa data show. Most popular March destinations for Brazilian gasoline cargoes include the Caribbean, Singapore, the Netherlands and the US.

Petrobras' export activity picked up starting February as it resumed gasoline shipments to the US and ramped up diesel exports to India.

Brazil's independent fuel importers have cut volumes for March, preferring instead to purchase from Petrobras amid domestic demand loss and seeking to avoid risk amid high global market volatility.

In Brazil, demand has fallen as the country began implementing a lockdown due to the Coronavirus pandemic. Diesel demand dropped between 15-20pc since 16 March in comparison with the first half of March, while gasoline demand dropped between 30-50pc during the period, according to an Argus survey with fuel retailers, traders and brokers.

Petrobras' most recent bookings pointed to the unlikely destination — the US Atlantic coast. Demand and prices in New York Harbor have fallen sharply over the past week, and storage sites are filling so fast that sections of the Colonial pipeline are being utilized as storage.

By Amance Boutin and Chunzi Xu