September 12, 2023 [Oil Price]- Russia—after suffering Western oil embargos and price caps on its oil and oil products, has shipped its first crude oil cargo to Brazil in its quest to find more outlets for its fossil fuels.
The Aframax tanker Stratos Aurora is now less than 500 miles off the shore of Brazil, according to Bloomberg ship tracking data, carrying 650,000 barrels of Varandey crude oil from the Murmansk port.
Russian oil hasn’t been shipped to Brazil since 2016, but sanctions on Russian crude oil, as well as the price cap, have made it difficult for the country to find outlets.
India has been the top buyer of Russia’s Urals grade for months, even as the discount for Russian crude to Brent shrunk to just $5 per barrel or less. Russia’s September loadings bound for India are expected to be less, as Indian refiners now claim the discounts simply aren’t worth the high volumes they’ve been taking. Previously, India was getting a $30 per barrel discount. Russia has counted on India—and to a significant but lesser extent, China—to soak up most of the excess crude oil it is no longer shipping to countries abiding by the price caps and embargos following Russia’s invasion of Ukraine.
Brazil is part of the BRICs alliance, which also includes India and China—a group of emerging market countries hoping to strengthen ties and cooperate regarding trade and economic activities.
Varandey is a light, sweet, crude blend, different from the grades that have been mostly going to India and China.
Brazil is a major oil producer and holds large pre-salt reserves, and has aspirations to become the world’s fourth-largest oil producer. It currently pumps an average of 3.1 million bpd.
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