Added Sep 20, 2018

Analysis: US to Brazil diesel flows rise

Share this article
Vortexa Newsletter Subscribe and get Vortexa news straight to your inbox

Brazil’s diesel imports from the US are on track to reach multi-month highs in September, amid a recent decline in available domestic refining capacity following an unplanned outage at the country’s largest refinery in late August.

Imports of diesel (including gasoil) from the US, the country’s main supplier, could reach around 800,000t in September, up from as much as around 500,000t in August, preliminary flow data from Vortexa indicate.

Observed data show that three long-range (LR) tankers from the US Gulf coast are still scheduled to reach Brazilian ports before the end of the month. Arrivals earlier in September included several tankers that were initially heading to Europe but diverted to Brazil. 

State-controlled Petrobras’ Paulinia (Replan) 415,000 b/d refinery shut down crude distillation (CDU) and fluid catalytic cracking (FCC) units following a fire on 20 August. Activities at other operating units were suspended as a preventative measure. The resulting dip in refined products output, including diesel, supported spot import activity and a tightening of regional products markets.

Petrobras said on 29 August that the Replan refinery would resume operations at the unaffected units, meaning 50pc of the refinery’s production would be normalised within a short period of time. This included the “regularisation” of the distillation unit, catalytic cracking and hydrotreatment units and other affected units.

Alternative supply sources

Aside from elevated diesel imports from the US, supply is also flowing to Brazil from more unusual sources this month, Vortexa data show.

The medium-range (MR) tanker Minerva Pacifica arrived at the port of Suape on 19 September, after loading diesel from the Dutch port of Amsterdam, a major import location for European diesel.

Meanwhile a rare middle distillates cargo that loaded from Kuwait is expected to reach Brazil in the coming days. The LR1 tanker Flagship Ivy loaded from ports in Kuwait during 20-23 August and is currently broadcasting Suape as its final destination, for expected 23 September arrival.

The recent increase in Brazilian diesel imports may have curbed supplies for other Latin American buyers of US product, namely Mexico.

But tighter regional supply could be offset by the expected arrival of diesel-laden VLCC Tonegawa in the Caribbean region this week. The tanker is estimated to be carrying around 280,000t of diesel which could be discharged via ship-to-ship transfer onto smaller tankers for delivery to ports across Latin America.

The latest news

Get in touch today for a free trial