Crude Summit: Brazil, Guyana replace Urals in Europe

Brazilian and Guyanese medium sweet grades have replaced Russian Urals in Europe and are unlikely to face competition from other crude producing Latin American countries, according to Gustavo Hooper, head of trading and shipping at Brazilian independent Prio.

"After the changes with the Russia and Ukrainian war, China lost a bit of the market share for Brazilian grades and Europe gained momentum in the purchase of Brazilian grades," Hooper said Tuesday at the Argus Americas Crude Summit in Houston, Texas.

Brazilian and Guyanese crude have become an alternative for Russian medium sour Urals and Guyana is routing 60pc of its exports to Europe, he added.

But south of Brazil and Guyana is another growing oil producing country that expects to position itself as key exporter of sweet crude — Argentina. Argentina frequently exports its light sweet Medanito crude, which is produced in the Vaca Muerta shale formation.

The sweet crudes from all three Latin American countries already share a key destination market at the US west coast, although Medanito is mostly transported on Panamax tankers, while larger vessels can be used to haul Brazilian and Guyanese crudes. Medanito is expected to become a regional grade and less likely to compete globally with Brazilian and Guyanese crudes due its logistical constraints, Gustavo said.

The potential of additional Venezuelan crude is also not expected to compete with Brazilian and Guyanese crude due to the difference in crude quality, as Venezuela exports are mostly heavy sours. Venezuelan crude flows have also shifted away from Asia and into the US Gulf coast, which "opened the Asia market for us to move more of our barrels to," Hooper said.

By Giovann Rosales