Uncertainty over tariffs halts oil shipments from Brazil to US, says lobby group
Oil is Brazil's top export to the U.S. and was exempt from the 10% April tariff imposed on Brazilian exports, but it is unclear whether the commodity will remain exempt under the new 50% tariff set to come into effect on Friday.
"This time we have no way of knowing," said Ardenghy. IBP represents oil companies in Brazil, such as Petrobras (PETR4.SA), opens new tab, Shell (SHEL.L), opens new tab, TotalEnergies (TTEF.PA), opens new tab, ExxonMobil (XOM.N), opens new tab and Equinor (EQNR.OL), opens new tab.
"Business involving cargo that has to leave Brazil for the U.S. is suspended," Ardenghy said.
Instead of shipping their product to the United States, companies are storing oil on floating production vessels or on cargo ships, Ardenghy said.
Because it takes around 21 days for a shipment to reach the U.S. from Brazil, oil shipments were stopped once it became impossible to reach their destination before Aug. 1, he said.
If there is no exemption, Brazil is likely to redirect shipments to Europe and India, he said.
"But, for now, everything is on hold, waiting for what will come on August 1st," he added.
In 2024, Brazil exported a total of 1.78 million barrels per day (bpd), of which 243,000 bpd went to the U.S., according to government data compiled by consultancy group StoneX.
Petrobras, Brazil's state-run oil firm and a top oil producer and exporter, has sent about 8% of its oil exports in the second quarter, the firm said in a filing on Tuesday.
Earlier this month, Petrobras Chief Executive Magda Chambriard told Reuters that the company may redirect the oil it sells to the U.S., sending more to Asia and Pacific markets if the higher U.S. tariffs for Brazil come into effect.
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