Brazil oil exports hit a monthly record in March, even as an export tax went into effect, with oil companies having no room to relocate shipments, government data and experts showed.

Until March 24, the oil volume exported by Brazil reached 9.4 million tonnes, a 75.4% growth from the same month last year, foreign trade agency Secex data showed.

The increase comes after the country’s oil output were for months at the highest levels ever recorded, while demand at Brazilian refineries was weak, at least in January, according to official data.

The new 9.2% tax on exported oil, which will last for four months, was announced by the government on February 28, one day before it began to be levied, in order to offset a decision to partially maintain a tax exemption on some fuels.

“Despite having this extra tax on exports, there were already contracts, the calendar of oil lifting had already been agreed for each field, there was no way to change it,” Marcelo de Assis, director of exploration and production research at Wood Mackenzie, told Reuters.

In large offshore fields in Brazil, it is common for operators to take turns removing the oil to which they are entitled to every time the tanks on the platforms fill up. This schedule is arranged in advance.

Assis also pointed out that “February is a short month” and that it is possible that some cargoes have been moved to March, contributing to the record.

In a note to Reuters, the Brazilian Petroleum Institute (IBP), which represents oil companies in the country, said that this month’s result was also influenced by a much lower number of vessels in February, when the country exported about 2.5 million tonnes, the lowest volume for the month since 2015.

Brazil previous monthly record was 8.5 million tonnes exported in December 2019, according to data mentioned by IBP.
Source: Reuters (Reporting by Marta Nogueira; Editing by Steven Grattan)