Brazilian crude exports fell by around 30pc to 5.47mn t (1.29mn b/d) in August compared with July, partly reflecting congestion at Chinese ports caused by severe floods in the Yangtze basin.
But crude outflows were up almost 15pc compared with August 2019, according to preliminary data from Brazil's trade ministry MDIC.
In terms of crude export receipts, China accounted for around 88pc in August compared with 73pc of the around 1.94mn b/d dispatched in July, according to the MDIC data.
The Netherlands, Portugal and France increased their share of export receipts compared with August 2019, with the US reducing its share in the same period.
Exports could retreat further starting in September as Brazil's state-controlled Petrobras launches major upstream maintenance that could reduce the company's monthly production by around 200,000 b/d. The delayed campaign, which was originally scheduled for January 2020, will be coupled with downstream maintenance that is not expected to significantly impact domestic fuel production, a Petrobras executive tells Argus.
In late August, Petrobras, which accounts for around 75pc of domestic oil production, said that lower price premiums and floods had disrupted crude flows to China, the main destination for its light sweet pre-salt grades.
"The lineups in China are going down from 30 days, less than 15 days, some ports less than one week. With the floods part of the river basin stopped. Demand is slightly lower, more on premium than demand, but we believe it will come back in the coming weeks," Petrobras' head of international trading Alexandre Leite told Argus in a recent interview.
Brazil produced 3.078mn b/d of crude in July, confirming a steady climb off of an April trough caused by the pandemic, according to data from oil regulator ANP.
Petrobras has said its decision to retain a 2020 domestic production target of around 2.7mn b/d of oil equivalent (boe/d) is associated with a Chinese economic rebound, but the firm is also monitoring recovering domestic fuel demand and the production of low-sulfur fuel oil for export.
