Could Brazilian Oil Emerge as One of the Big Winners of the Iran War?

• The fallout from the US-Israel war on Iran has disrupted energy trade through the Strait of Hormuz, with Iran's effective closure of the strait and the corresponding US naval blockade on Iranian ports pushing China and India to source crude from suppliers seen as safer and more reliable. Brazil has emerged as one of the clearest beneficiaries, though analysts say it cannot replace the Middle East as Asia's main oil supplier. Kpler's Sumit Ritolia noted that Brazil's medium-sweet pre-salt grades fit many Asian refinery slates, and Asian buyers are competing for barrels not exposed to Gulf shipping risk.
• Asian countries imported about 1.2 million bpd of crude from Brazil in 2025, rising to roughly 1.8 million bpd between January and May 2026, according to Kpler. Brazilian production averaged 3.77 million bpd in 2025, rising to an average of 4.06 million bpd between January and May, with 4.11 million bpd in May.
• Since March 2026, Brazil's production has increased only marginally by around 50,000 to 100,000 bpd, indicating limited short-term flexibility to rapidly ramp up supply. The real difference is Petrobras redirecting exports toward Asia, where refiners are paying more for crude that does not pass through the Gulf. More than 60% of Petrobras exports are now heading to China, while exports to the US have reportedly fallen to zero from about 60,000 bpd in March.
• The OECD reported in March that rising crude prices are expected to support Brazil's trade balance, and the country's Ministry of Finance estimates that Brent crude reaching $100 per barrel would generate revenue equivalent to almost 1% of GDP above current 2026 budget projections.
• Chinese imports of Brazilian crude averaged about 1.316 million bpd between January and May 2026, compared with about 704,000 bpd in 2025, per Kpler. In dollar terms, the Brazil-China Business Council shows the value of Brazil's crude exports to China surged by almost 95% to $7.2bn in the first quarter of this year.
• Indian imports of Brazilian crude averaged about 238,000 bpd between January and May, up from roughly 100,000 bpd in 2025, and Brazil became India's fourth-largest crude supplier in April. India's demand is being driven by rising domestic fuel consumption – unlike China, which has pivoted more heavily to EVs – and by less flexibility to absorb a prolonged disruption through strategic reserves, giving refiners a stronger incentive to keep crude flowing where supplies are available and profitable.

(Source: Aljazeera News)