Brazil, the Latin American giant known for its agriculture, has reached a significant milestone, with petroleum for the first time overtaking soybeans as its largest export commodity. According to the latest data from Brazil's Ministry of Trade, Brazilian petroleum exports grew by 5% in 2024, reaching $44.8 billion, surpassing soybean exports. This shift is driven by a combination of global energy demand growth and a drop in soybean prices.
China Becomes Brazil's Largest Oil Buyer
Data shows that China is the main destination for Brazilian oil exports, accounting for as much as 44%. Following China are the United States, Spain, and the Netherlands. José Augusto de Castro, Executive President of the Brazilian Foreign Trade Association, noted that the drop in soybean prices and sales volumes was pivotal for oil's rise to the top. However, he expects that in 2025 soybean export revenues will reach $49.5 billion, potentially reclaiming its position as the largest export commodity.
The Rise of the Oil Industry
Driven by the state-owned Petrobras, Brazil has emerged as the world's eighth-largest crude oil supplier. In 2023, Brazil's oil wells produced a daily average of about 3.4 million barrels, with the share of exports in total supply steadily increasing. By 2027, with rising production and overseas demand, Brazil's daily crude exports are expected to reach 2.5 million barrels.
Brazil's competitiveness also benefits from its low-carbon oil extraction methods. For example, the carbon intensity of the Tupi and Buzios fields is only half of the global average. Roberto Ardenghy, President of the Brazilian Oil and Gas Industry Association (IBP), pointed out, "European refineries will have a preference for low-carbon oil products, giving Brazilian oil a clear competitive edge in this regard."
Policy Divergences and Future Challenges
Despite the robust growth of Brazil's oil industry, policy divergences pose potential future risks. In recent years, Petrobras' exploration plans in the northern coastal basin have stalled due to environmental concerns. Environment Minister Marina Silva opposes the related projects, while Petrobras President Magda Chambriard has warned that without new explorations, Brazil may become an oil importer again after 2030.
This controversy highlights the contradictions within the Lula administration regarding fossil fuel policies. On one hand, Brazil seeks to consolidate its position as an oil exporter; on the other, environmental protection pressures and energy transition demands may restrict the launch of new projects.
Looking Ahead
As the largest economy in Latin America, the growth in Brazil's oil export revenues is significant for economic development. However, the future development of its oil industry still faces internal and external challenges, including the coordination of environmental policies, changes in global energy market demand, and the sustainability of technological and capacity expansion.
Brazil's ascent to the top export commodity in petroleum presents both opportunities and significant tests for policy and strategic decisions.
