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In an increasingly connected world, Petrobras profits and Brazilians suffer from China's demand for oil – the state-owned company sells the barrel at commodity prices and charges Brazilians high prices per liter of diesel and gasoline.
According to data revealed by the General Administration of Customs, during this Thursday, June 09, it is estimated that oil imports by China have increased by 12% compared to the same period of the year 2021. This directly impacts in commodities and in the Brazilian economy, even more so in relation to Petrobras, which has, since 2016, been authorized by the Temer government to vary its prices according to the foreign market and pass them on to Brazilians. According to the state-owned company, fuel prices are already “double-digit lagged” and the President of the Republic, Jair Bolsonaro, struggles to control variations by suggesting a decrease in state ICMS taxation.
According to Reuters, in an exclusive article, China would be one of the largest oil importers in the world, surpassing the mark of 45 million tons during the month of May, which means more than 10,79 million barrels per day, a value that is higher compared to the year 2021 in the same period, in which there was an average import of 10,3 million barrels of BPD. Meanwhile, imports from the country during the month of January fell by 1,7% compared to the same period in 2021, but even so, they exceeded 200 million tons brought from abroad to the domestic market.
Refinery operations have recovered after sharp declines during March and April, currently, the value of Brent is being quoted with an accumulated increase of 65% to US$ 122 per barrel. Could it be that the Chinese are reviewing for the Russians?
One hypothesis raised in relation to the increase in imports from the Chinese, even in the face of a moment of global economic crisis due to the price of oil, having accumulated 65% in one year, is that the Chinese and Indians are sending a part of what is bought to the Russians, who suffered from trade sanctions imposed by the US.
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The increases were greater than expected, given that, during the months of March and April, the refining and oil purchase sector suffered from high inflation. The Chinese commodities consultancy JLC claims, however, that they are in a state of recovery from Covid-19 and that more than 60% of all refineries have already returned to work.
Stocks reach the highest level since July 2021
Vortexa Analytics states that oil stocks held by the Chinese are at one of the highest rates since 2021. By the end of March, they already had more than 920 million barrels, which would be enough to process the operations in at least two months from Chinese refineries. Meanwhile, exports of oil derivatives and refined products fell by 40% in May, thus showing that the country needs to consume a lot and is not interested in selling a large part of what is manufactured.
With the high consumption coming from China and the instability regarding the war between Russia and Ukraine, it is estimated that the impacts will soon fall on the Brazilian economy, with the realization of new price increases arising from Petrobras.
On the other hand, it is worth noting that China had a drop in its imports of natural gas, which fell by 9% in the first five months of the year. LNG is down 19%.
