Russia is landing new buyers for its sanctioned diesel all over the world and Brazil's taking advantage of the steep discounts.
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Phil Rosen
Apr 22, 2023, 18:06 IST
Russian Prime Minister Dmitry Medvedev (C) and Rosneft Chief Executive Igor Sechin (L) inspect production facilities at the Kondinsky group of oil fields in Khanty-Mansi Autonomous District - Yugra, Russia November 21, 2017.Reuters/Sputnik Photo Agency
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Matt Smith is lead oil analyst, Americas for Kpler. This conversation has been lightly edited for length and clarity.
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Phil Rosen: You shared some data on how Brazil is seeing a dramatic uptick in Russian diesel imports, and a decrease in diesel imports from other sources, including the US. What's going on here?
Matt Smith: Everything comes back to economics. We could try and read between the lines, but ultimately it comes down to price — it is seemingly cheaper for Brazil to pull in Russian diesel in recent months than it is to import barrels from the US.
If it was just the odd cargo, it could be suggested that Brazil is the destination of last resort when Russia is unable to sell its diesel to anyone else, but the volumes delivered in the last three months suggest something more of a trend.
How does this data on Brazil's diesel imports fit into the broader picture with China and India?
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MS: Different groups of countries have different agendas. While some countries such as India and China have ramped up imports of Russian crude, only to refine it and send it back in the form of refined products to countries that have applied sanctions on Russia, there are other countries such as Libya, Tunisia and Brazil that are making decisions based on economics.
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