A survey by a global information provider showed that oil trade flows between Brazil and China peaked in the third week of April. During that time, the trade flows reached nearly 2 million bpd. However, it declined to about 800,000 bpd last week. China received 60% of Brazilian oil exports in May, the survey noted.
Brazil’s state-owned oil company Petrobras also plans to strengthen its relationships with Chinese independent refiners based in Shandong. Brazilian crude oil is similar to China’s domestic grades which have seen a decline in production. Petrobras has also increased its storage capacity in Southeast Asia to anticipate extreme volatility which may include low oil prices and tanker freight rate rally.
Tanker tracking data showed that currently, 29 ships are heading toward China, carrying about 50 million barrels of crude oil from Brazil. Many of these cargoes were purchased in April when oil prices fell significantly. Some of them are expected to arrive in China by late July.
