Brazil keeps importing Russian diesel to ease price pressure

Brazil will keep importing Russian diesel as long as it helps to contain fuel prices for Brazilian motorists, Mines and Energy Minister Alexandre Silveira said in an interview. 

Russia has consolidated its position as Brazil’s top supplier of the fuel this year, surpassing the US. Silveira, who is in Washington to discuss collaboration in the energy transition, sees no pressure coming from the Biden administration to halt the imports. 

“If the import of diesel, whether Russian or from any other nation, favors keeping domestic prices down, then it is not a concern,” Silveira said. There is an “understanding that developing countries need to expand commercial ties to strengthen economically and combat inequality.”  

The US and its allies are trying to limit the flow of petrodollars into Russia to reduce available funds to wage war in Ukraine.  

Brazil’s state-controlled oil giant Petrobras also has to compete with importers and its next next five-year strategic plan will focus on making the country self-sufficient in gasoline and diesel production, he said.

Petroleo Brasileiro SA, as the Rio de Janeiro-based producer is known, will shield Latin America’s largest economy from fuel price spikes in case Israel-Hamas war escalates to other Middle Eastern nations. Petrobras is taking into account domestic production costs under a new fuel price policy it announced in May, which will help reduce the impact of volatility in global oil markets, Silveira said. 

Brazil has also been importing oil and natural gas from Russia this year. Two tankers with Russian Arctic crude have unloaded in northeastern Brazil since early September, and Brazil imported a Russia-sourced cargo of liquefied natural gas in May, according to shipping tracking data compiled by Bloomberg.