The Rise of Oil Exports
Oil has overtaken soy as Brazil’s main export for the first time in 12 years, according to trade data published by the government. In 2024, foreign oil sales reached nearly USD 45 billion, surpassing soy’s USD 43 billion. This marks a significant increase in Brazil’s oil exports, with the value more than doubling in the past five years and close to quadrupling in the past decade.
China Drives the Demand
China is the primary driver of this demand, accounting for 44% of Brazil’s crude oil exports in 2024. The US and Spain follow with 13% and 11% respectively. In the past decade, the value of oil exports to the Chinese market has grown by almost five times.
- China’s demand for Brazilian oil is expected to continue growing, despite a slowdown in consumption in the past five years.
- The intensification of the US-China trade war may prompt Brazil to increase its oil exports to China.
- China’s oil consumption is expected to peak later this year, but its demand for refined fuel from Brazil is increasing.
The Shadow Over National Climate Ambitions
Brazil’s growing oil exports cast a shadow over the country’s national climate ambitions, as well as several environmental and clean energy cooperation agreements with China. The country is set to host the COP30 climate summit in the Amazonian city of Belém in November. However, the government’s increasing push for oil exploration in ecologically sensitive areas, such as Foz do Amazonas, is raising concerns.
“Brazil is reliable for China”
“Brazil is a reliable country for China,” says Tulio Cariello, director of content and research at the Brazil-China Business Council (CEBC). “It’s a major producer, and has a lot of research, development and stability. The country enjoys a privileged geopolitical situation, as it is far from disputed regions.”
“Although it’s a more incipient product on the Chinese import list, we believe – given the dynamics of growth – that there may be more opportunities or demand in the future.” – Igor Celeste, market intelligence manager at the Brazilian Trade and Investment Promotion Agency (ApexBrasil)
Financing the Energy Transition
Brazil’s growing oil exports are casting a shadow over its climate ambitions. However, experts believe that the country can reconcile its positions by maintaining its defence of “common but differentiated capacities and responsibilities”. This principle, enshrined under the United Nations’ climate convention, holds that developing countries must reduce their greenhouse gas emissions, but without assuming the same targets as developed countries.
- Brazil can reduce its greenhouse gas emissions by investing in clean energy sources and increasing energy efficiency.
- The oil and gas industry can contribute to the energy transition by developing new technologies and investing in renewable energy.
- The government needs to establish mechanisms to link oil revenues to investments in clean sources, or to monitor such allocations.
The Lack of Concrete Proposals
Brazil lacks concrete proposals to reduce its fossil fuel dependence. The Energy Research Company (EPE) has an energy expansion plan up to 2050 that does not include clear carbon-neutrality scenarios. The government’s Climate Plan, conceived as a pathway for climate change mitigation through to 2035, has been in preparation since 2023. However, a clear plan to reduce dependence on oil is still lacking.
“It’s impossible to say, ‘This item here is from royalties that the federal government earns from selling oil, and this money is being used for wind energy or public transport,’”
Shigueo Watanabe Jr, a researcher and physicist specialising in climate change at Climainfo, a São Paulo-based non-profit dedicated to climate change news and research, highlights the lack of transparency in funding for the energy transition. “Without designating where the money is going, and without metrics that allow us to check whether this plan is being implemented, this story of financing the energy transition is a fantasy.”
The Contradiction Between Oil and Climate Ambitions
Brazil’s oil boom is a contradiction to its climate ambitions. The country will continue to exploit oil unless there is a revolution, which is unlikely. However, the government needs to have a plan to stop burning oil at some point, as soon as possible. André Duchiade, a Brazilian journalist and translator based in Rio de Janeiro, highlights the contradiction between Brazil’s oil dependence and climate ambitions:
“Brazil today extracts more or less three million barrels of oil a day. We consume between one million and two million, and that million that’s left over, we export. They export to make money; they get some royalties. But do you need to export all that oil? Probably not.
