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There is a lot of optimism to report from Brazil with oil
companies getting ready to boost exports as the pre-salt production
increases. International shipments of crude oil are estimated to
triple over the next decade. The next big challenge for the country
is strategically positioning itself in a market that keeps on
changing globally. Restructure seems to have been completed with
Petrobras now holding no refineries abroad, which makes client
relationships rather important for its future performance. The
company has been focusing on improving its logistics by taking
steps to significantly reduce delivery times. They have also
recently opened a crude oil tank in China's Qingdao Port, with a
capacity of two million barrels.
Furthermore, Petrobras has been very active in planning
improvements domestically as well. They plan to add new logistics
bases. A contract was signed in late Q1 with Açu Petróleo for
transshipment operations at Açu Port, north of Rio de Janeiro.
Norwegian Equinor finalised a deal with Açu Petróleo for
ship-to-ship movements at the Açu terminal.
Recent data by IHS
Markit's Commodities as Sea suggests shipments to have
increased around 25% so far this year. China has absorbed most of
Brazil's barrels and flows to the US boosted after the sanctions on
Venezuelan crude oil. Trade to other destinations across Asia has
also increased fast, especially during June. The growth expected
for the second half of this year and in 2020 will further
strengthen the role of the Latin American country among the world's
leading exporters. Brazilian crude oil industry seems to have taken
advantage of Venezuela's collapse, with the country considered the
second major driver of global supply growth this year, after the
US. Many large international companies are looking to increase
their exposure to the country's production, with several projects
being already negotiated.
Brazil has become very important for the VLCC market. We have
seen an abundance of ship loadings there compared to last year and
several ballasters positioning near the Brazilian coast targeting
future loadings of the region. The market share of the country in
the VLCC demand has been growing fast along with the US Gulf. Ships
loaded in the region typically cover much longer distances to
destinations across Asia, primarily China.
Posted 19 July 2019 by Fotios Katsoulas, Liquid Bulk Principal Analyst, Maritime & Trade, IHS Markit
