After a sharp drop in May, oil production rebounded in July, totaling 3,08Mb/d, up 11% year-on-year

While the COVID-19 pandemic has hit Brazil's economy hard, oil exports recorded record numbers. According to the latest data from the regulator ANP , between January and July, the country exported 316Mb (million barrels), or 1,5Mb / d, an increase of 37% compared to the same period in 2019, which was already a record year for oil exports.

Due to the drop in the price of oil, however, oil export earnings dropped from $13,9 billion to $12,2 billion.

Oil imports also fell, to 34,7Mb (165.000b/d), or 20,4%, favoring the oil trade balance thanks to lower consumption amid lockdowns to curb the spread of the coronavirus.

Oil import spending reached $2 billion, compared to $3 billion in January-July 2019. 

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Oil product exports were a record 75,8MB, up 53,7%, but revenues were down to $3,48 billion compared to $3,53 billion a year earlier. 

Imports of oil derivatives totaled around 102Mb, down 16%, with total spending of US$4,96 billion, compared to US$7,9 billion in the same period of 2019. 

China's strategy to stock oil in the first four months of the year, taking advantage of the low oil price, is one of the reasons for the growth in exports, the technical coordinator of the NSTITUTO oil studies (INEEP), Rodrigo Leão, told BNamericas .  

"In addition, Petrobras has export agreements with China and other countries, which guarantee international demand for Brazilian oil," he added. China is the main importer of Brazilian oil. 

The growth in oil products is primarily due to Brazil's competitive advantage in the low sulfur bunker oil market, the use of which has been spurred by a new International Maritime Association (IMO) regulation. 

Brazil's advantage comes from the “sweeter” oil coming from the Santos and Campos basins.

“We were able to quickly convert our refineries to navigation oil and Petrobras did a good job in the commercial area, finding demand for a new product, with which it had no historical connection, finding demand in Singapore, for example”, Leão said.

Leão doesn't see much room for further export growth, however. “If Petrobras manages to maintain the current level, it would already be a good performance”, he said, considering that oil consumption has decreased in Europe and the US continues to need less imports due to shale gas and the tight oil revolution. 

Production

After a sharp drop in May, oil production rebounded in July, totaling 3,08Mb/d, up 11% year-on-year, and approaching the record level of January, when production surpassed 3,1Mb/d. d, according to ANP data.