9 February 2026, 15:56 – TradeWinds News
Recipe for growth includes push and pull of the ethanol trade and a lack of refineries, brokers say
Brazil has been cooking up a recipe for growth in its tanker market profile.
It includes one part crude production expansion and one part strong diesel demand, combined with a dearth of new refinery construction.
And do not forget a dash of ethanol, which has had seesawing imports and exports.
Add it all up, and Brazil’s tanker brokers point to continued growth in the VLCC and MR product tanker markets, driving demand for shuttle tanker tonnage.
In 2025, Brazil’s crude production reached a record 3.77m barrels per day, marking 12.3% growth from 2014, according to data from Brazil’s petroleum regulator.
That is expected to grow as oil producers, led by Petrobras, push up output from the country’s pre-salt offshore fields.
Gustavo Sa, a partner at Rio de Janeiro-based broking house Tide Maritime, said recent data showed production has topped 4m bpd for the first time.
Capped refineries
But Sa said Brazil’s refineries can process only 2.2m bpd, and were built decades ago for crude grades that predate the type of oil pumped from the country’s offshore discoveries.
The growing surplus appears headed for long-haul trades to India and particularly China, which means this is a VLCC play.
Sa said: “With geopolitics, China is much closer to us than the US these days, so the long-haul to China is the most likely main destination.”
Bruna Carvalho, who heads the Clarksons Rio de Janeiro tanker desk, said it used to be that Petrobras underperformed its production estimates.
Now it is the opposite, with production from the government-controlled company and others topping expectations.
The result is rising growth in VLCC loadings in Brazil.
Petrobras, which has just a few VLCCs on time charter, has been booking several on the spot market each week.
Growth ahead
That is expected to grow.
Carvalho said: “The plan is to reach, by 2035, 5.2m bpd — 1m bpd more — and there is no more refinery capacity. And there is nothing in the pipeline to increase it.”
As Brazil bolsters its crude output, its hunger for clean products is also growing, but without new refinery capacity to feed it.
Sa said logistics around the country are mostly handled by trucks, leading to booming demand for diesel.
That has led to a growing role in the product tanker sector, mainly involving MR tankers with some LRs joining the trade.
A who’s who of Brazil’s downstream fuel companies have been setting up chartering desks in the country.
Sa said Acelen, Brava Energia, Ipiranga, Petrodansk, Raizen and Vibra Energia have all set up tanker teams in Brazil in the past two years.
Shipping community
“Now we have a shipping community growing, making decisions on chartering ships,” he said.
And Sa said that means the shipbroking community is growing to serve that chartering community.
He said: “The whole world is seeing Brazil, despite the fact that we are a third-world country, as an opportunity for business, not only oil, but for [clean products].”
In Brazil’s shuttle tanker market, Carvalho said oil companies have been fixing each other’s vessels in an emerging spot market to meet the growing demand to haul offshore production.
As production grows, it is not clear how long this tonnage swapping will meet the needs.
Carvalho said: “The production is increasing, everybody is looking for tonnage, and there is nothing. There is nothing available for 2026 or 2027.”
And she noted that newbuildings would not be available for two to three years.
Ethanol growth
Brazil is the world’s second-largest producer of ethanol, after the US, but it is also a major importer of the fuel.
Brazil had a challenging year in 2025 as US ethanol pricing allowed it to dominate international trade in the fuel.
But Tide Maritime chemical tanker broker Elton Ferreira, a partner at the firm, said that may change this year as more sugar cane is used to make ethanol, instead of sugar.
Hoping for growth
“I hope we are going to see more exports,” Ferreira said.
Where will that ethanol go?
“That’s easy,” Ferreira said, citing a new ethanol mandate in Vietnam and other trends in Asia that could boost demand for the fuel.
“We do see exports to India, because you have a shortage; Vietnam, that’s for sure; and the Philippines.”
Source: TradeWinds / Br8
