Brazil overtakes Saudi Arabia to firmly hold second place in China's crude oil imports! China's crude oil import structure shifts

In September 2026, China imported 5.147 million tons of crude oil from Brazil—a 17.7% year-on-year increase. Brazil has held steady as China’s second-largest crude oil supplier for several consecutive months, accounting for 13.9% of total imports, while Saudi Arabia has slipped to fifth place with only a 7.3% share. Just two years ago, such a ranking would have been unimaginable. A chokepoint strait is now reshaping the global petroleum trade map. 01 Not 'a little more purchased'—but a rewritten hierarchy In the first nine months of the year, Brazil’s crude oil export value to China reached USD 21.8 billion, up 49% year-on-year; export volume rose 27%, with price contributing 16.8%. China purchased roughly half of Brazil’s total crude oil exports—nearly seven times more than India, its second-largest buyer. Viewed on a monthly basis, this shift becomes even clearer: In June, Brazil exported 4.212 million tons to China (14.4% share), while Saudi Arabia’s exports plunged 56.7% year-on-year to 3.42 million tons; by August, Brazil had overtaken Saudi Arabia with a 9.9% share versus Saudi Arabia’s 8.3%. China’s top three crude suppliers shifted—from 'Russia–Saudi Arabia–Angola' to 'Russia–Brazil–Iraq'. 02 Pre-salt fields sustain the 'second pole' Brazil’s ability to absorb this surge is not due to temporary output hikes, but rather to a sustained production ramp-up spanning nearly two decades. In 2025, Brazil’s average daily oil output stood at approximately 3.8 million barrels, of which pre-salt fields contributed around 3 million barrels—roughly 80% of national output. These pre-salt fields lie in deep- and ultra-deepwater areas off southeastern Brazil, some located about 300 km offshore, with total water-to-reservoir depths reaching up to 7,000 meters. Petrobras’ accumulated engineering expertise in ultra-deepwater operations forms the foundational support behind this export growth. In 2026, Petrobras is expected to exceed its annual production target: As of August, its average daily output stood at ~2.6 million barrels—above the original target of 2.5 million barrels. Export logistics are also being upgraded: Brazil is accelerating a new round of port infrastructure investment to prepare for a decade-long expansion of pre-salt field exports. Only an upward-shifting supply curve could create space for Chinese buyers to redirect orders from the Persian Gulf to South America. 03 RMB settlement: an undercurrent—not mere garnish The pivot in oil trade never occurs solely aboard tankers.

ISI EMIS Industry Insights | Recent Hot Topics in the Global Automotive Industry

3. Coal mining 1. Oil exploration and production During the U.S.–Iran war, Brazil’s crude oil production hit a record high: Brazil’s crude output surged to an all-time high in June. As Brazil and other oil-producing nations distant from the Middle East increased supply, the impact of the U.S.–Iran conflict—and associated disruptions to shipping through the Strait of Hormuz—on global oil markets was partially mitigated. According to data from Brazil’s National Agency of Petroleum, Natural Gas and Biofuels (ANP), crude oil production in June rose ~19% year-on-year to 4.5 million barrels per day (bpd), up ~4% from May; total oil and gas output climbed to 5.8 million barrels of oil equivalent (boe) per day. Increased output from Brazil and others helped fill part of the supply gap left by reduced Middle Eastern exports. Prior to the conflict, roughly one-fifth of global oil supply transited the Strait of Hormuz. The resulting supply disruption also overturned earlier market expectations of an oil surplus in 2026. Petrobras—the state-controlled oil company—has been the primary driver of Brazil’s production growth. It is intensifying extraction efforts, with output from certain offshore platforms in deepwater fields like Búzios already exceeding design capacity. Per ANP statistics, Petrobras—either independently or via joint ventures—operates oilfields responsible for ~87% of Brazil’s total output; the Búzios field is the country’s largest oil producer, while the Mero field leads in natural gas output. Latest figures show Brazil’s combined oil and oil-equivalent output remains above 5 million bpd, albeit slightly down from the June peak. India approves INR 840.84 billion 'Samudra Manthan' initiative to advance offshore energy development: The Indian government has approved the 'Samudra Manthan' offshore energy exploration program, with a total budget of INR 840.84 billion, aiming to boost domestic oil and gas output, reduce dependence on crude imports, and strengthen long-term energy security. Phase I of the program runs until March 31, 2031, covering offshore exploration, deepwater drilling, supporting infrastructure, and localization of oil & gas equipment manufacturing. India’s crude import dependency has risen steadily—from 78.5% in FY 2014–15 to 88.7% in FY 2025–26. Meanwhile, output from mature fields—including Mumbai High and several in Assam—is continuously declining. Though India ranks third globally in oil consumption, it stands only around 20th in oil production, widening the supply–demand gap. The program comprises four key components: (i) INR 285.34 billion allocated for high-resolution offshore seismic surveys to identify new hydrocarbon resources and lower exploration risk; (ii) INR 432 billion for drilling 60 deepwater exploration wells—with the government covering up to 50% of eligible drilling costs; (iii) INR 100 billion to build shared offshore production and transportation infrastructure, accelerating commercialization of newly discovered resources; and (iv) INR 20 billion to establish oil & gas manufacturing and service centers, promoting localization of critical equipment and reducing reliance on imported technology. Through this initiative, the Indian government aims to raise domestic oil and gas output from ~62 million tonnes of oil equivalent (toe) annually to 80 million toe, and expand technically recoverable hydrocarbon resources from 1.6 billion toe to 2.2 billion toe. Shell profits from market volatility, posting second-highest quarterly earnings in history: Shell reported adjusted quarterly earnings of USD 9.8 billion—exceeding both market expectations of USD 8.9 billion and last year’s USD 4.3 billion—ranking second only to its USD 11.5 billion record set during the 2022 European energy crisis.

Petrobras' third-quarter oil and gas output rises 12% from a year earlier

13 hours ago

Brazilian state-run oil firm Petrobras reported a 12% year-on-year increase in third-quarter oil and gas production to 3.51 million barrels of oil equivalent per day. The output exceeded business plan forecasts for 2026-2030, while oil exports reached a record 1.25 million bpd.

reuters

2026-04-30

Petrobras Output Hits Record as Iran War Jolts Oil Markets

2026-05-02

Brazil's Petrobras raises natural gas prices by 19% after oil shock

2026-05-11

Brazil's Petrobras posts 7% decline in first-quarter net profit

2026-05-11

Petrobras Misses Profit Estimates Despite War-Driven Oil Rally

2026-05-25

Petrobras Bets on Fertilizer Revival to Cut Brazil's Import Dependency, But Political Risk Looms