Brazil’s crude oil trade route to China is poised for significant growth in 2025, driven by a series of new Floating Production Storage and Offloading units (FPSOs) coming online at the end of 2024. This development has allowed Brazil to enhance its crude oil production and boost exports early in 2025. Recent figures from Vortexa indicate a notable resurgence in Brazilian crude exports, which soared to nearly 2 million barrels per day (mbd) in March, recovering from a seasonal low of 1.3 mbd in January. Reflecting this rebound, our fixture data shows a marked increase in Very Large Crude Carrier (VLCC) shipments from Brazil to China.
The number of liftings rose from five in January to 14 in March, maintaining elevated levels into April and May. This upturn follows a period in 2024 where VLCC cargo counts declined due to Chinese refiners’ preference for sanctioned Iranian oil, utilizing dark fleet vessels and diverting demand from traditional markets. Several market dynamics are fueling this resurgence. Tighter US sanctions on dark fleet tankers involved in Iranian and Russian trades have prompted refiners to seek alternative sources as their access to discounted sanctioned crude becomes increasingly risky.
Brazil, with its ample crude supply, emerges as a prime candidate to meet this demand. Furthermore, China’s 10% retaliatory tariffs on US crude imports have rendered American oil less appealing, pushing buyers toward more economically viable options like Brazilian crude. In March, Saudi Arabia’s hike in official selling prices to Asia has further pressured price-sensitive refiners, making Brazilian crude an attractive alternative. While the shipping duration from Brazil to China is longer, requiring over 100 days, this extended commitment helps tighten available tonnage and supports VLCC freight rates.
Looking ahead, if Brazil continues to ramp up production, the VLCC flow from Brazil to China is expected to remain strong, benefiting the broader VLCC market in the coming months.