Could Brazilian oil emerge as one of the winners of the Iran war? | | Powerful Stories

China and India are turning to Brazil to replace oil spills as the fallout from the US-Israel conflict over Iran continues to disrupt energy trade through the Strait of Hormuz.

With oil hard to come by and supply from Russia heavily constrained by sanctions, Asian buyers are increasingly looking for crude oil from suppliers that are seen as safe and reliable.

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Brazil, once one of the world’s largest oil exporters, has been identified as one of the biggest beneficiaries.

Sumit Ritolia, analyst of refining and oil markets at Kpler, told Al Jazeera: “The disruption caused by the Iran war and the closure of the Strait of Hormuz has increased the importance of Brazil as a non-oil exporter in Asia.”

“China and India in particular have increased their purchases of Brazilian oil to protect the barrels that are not exposed to disruptions from Gulf shipping,” he said.

Experts say that Brazil will not replace the Middle East as the main source of oil in Asia. However, as shipping threats rise in the Gulf with Iran effectively closing the Strait of Hormuz and a naval blockade of Iranian and United States ports, its oil has begun to attract refiners seeking to avoid shocks.

Asian countries are expected to export around 1.2 million barrels per day (bpd) from Brazil in 2025, according to data provided to Al Jazeera by the trading company Kpler. This rose to around 1.8 million bpd between January and May this year, reflecting Brazil’s growing role in Asia’s efforts to break away from the Gulf.

How much oil does Brazil export?

Brazil had already expanded oil production in major offshore developments before the conflicts in the Middle East.

According to Kpler data, Brazil was producing about 3.77 million bpd of oil in 2025. Between January and May, this rose to 4.06 million bpd, and 4.11 million bpd in May.

But Ritolia said the increase is not just due to increased military activity.

“As of March 2026, Brazil’s production has risen slightly by about 50,000 to 100,000 barrels per day, indicating a short-term flexibility to increase production quickly due to global disruptions,” he said.

The real difference is where the oil is going, he said.

Petrobras, Brazil’s state-owned oil company, has also sent exports to Asia, where refiners pay higher prices that don’t go through the Gulf.

More than 60 percent of Petrobras’ exports now go to China, while shipments to the US have dropped to zero from about 60,000bpd in March, according to oilprice.com.

This change has started to benefit the Brazilian economy. The OECD It was reported in March that the increase in prices is expected to support the stabilization of trade in Brazil, while the Ministry of Finance of the country thinks that Brent crude reaching $ 100 per barrel will generate income equal to 1 percent of the gross domestic product (GDP) over the expected in 2026.

Who is buying most of Brazil’s oil?

Demand from China is driving Brazil’s exports, with Chinese exports to Brazil averaging 1.316 million bpd between January and May this year, compared to around 704,000 bpd in 2025, according to Kpler data.

In dollar terms, official data from the Brazil-China Business Council show that the value of Brazil’s exports to China rose nearly 95% to $7.2bn in the first quarter of this year.

Meanwhile, India has also significantly increased imports, exporting about 238,000bpd between January and May, up from about 100,000bpd in 2025, according to Kpler. In April, Brazil became the world’s fourth largest supplier of non-oil products to India.

“China and India, along with other Asian countries, need alternatives to Hormuz that are politically and physically safe,” Ritolia said.

“Brazil’s sweeter grades of intermediate salt are sufficient for most Asian refining slates, and Asian buyers are competing for barrels that are less vulnerable to Gulf shipping.”

India’s demand is also being driven by rising domestic fuel consumption, unlike China, which has been a major adopter of electric vehicles (EVs).

India also has limited flexibility to absorb long-term disruptions through strategic reserves, meaning refiners have a strong incentive to hold back when supplies are available and profitable.

What about countries beyond China and India?

Brazil also wants to develop strong ties elsewhere in Asia.

Foreign Minister Mauro Vieira said last week that Brazil was “ready to support Japan’s energy security” through increased exports, adding that Petrobras was ready to expand its presence there.

The comments came as Brazil continues to make political and economic progress across Asia, including South Korea, Japan and other Southeast Asian countries.

At the beginning of this year, Brazilian President Luiz Inacio Lula da Silva visited South Korea, where the two countries agreed to improve the relations between the “modern partnership” and signed several agreements aimed at expanding trade and economic cooperation.

With the Strait of Hormuz still partially closed, Brazil has become more important than America, especially for now, according to experts.

Is Brazilian oil a better alternative to Gulf oil?

Two of Brazil’s biggest exporters – known as Tupi and Buzios – are considered “sweet” oils, meaning they have very little sulfur and can be easily converted into fuels such as diesel and jet fuel.

This makes them attractive to Asian oil refiners who are trying to improve oil production in the face of global growth.

The US President, Donald Trump, also spoke Venezuelan oil to other countries, but this is a very heavy, “sour” oil that many refiners in Asia cannot process. Washington seized control of Venezuela’s oil industry following the ouster of President Nicolas Maduro in Caracas by the US military in January.

Brazil’s oil provides security for China, while in India, it also supports the refining economy if domestic oil prices continue to rise.

However, while Brazil’s crude is a better Asian refiner than Venezuela’s, it is no substitute for Gulf oil.

“Brazilian oil can replace the Gulf’s sweetened medium barrels and reduce the exposure of Hormuz, especially to China and India,” Ritolia said.

“But it doesn’t change if it replaces all the grades in the Gulf.”

What other restrictions are there on Brazilian oil?

Distance is a major problem for Brazil’s oil exports to Asia. Shipping crude oil from Brazil to China can take up to 50 days — longer than Gulf routes — increasing freight costs and tying up tanks in an already strained market.

Russia could become a strong competitor later this year when shipping routes in the Arctic reopen for the season. Cargo traveling from Arctic terminals in Russia to China can take about half the time of a Brazilian trip to China.

Last week, the US also announced a 30-day extension to a removal of sanctions on Russian oil and petroleum products already loaded on ships.

This could make Russian floating products more attractive to Asian buyers in the coming months.

“Brazil contributes to the diversification of exports to Asian countries, but its role as an alternative market is still limited due to the growth of Brazil’s non-oil products, the freight economy, and the competition of buyers from Europe and the US,” Ritolia said.

“Consequently, Brazil is a major contributor to Asia during the economic crisis, but it is unlikely that it will replace the Middle East in the long run.”