By Brazil Stock Guide – Brazil is set to reduce its dependence on imported oil products over the next decade, even as diesel and naphtha remain structural gaps, according to the new Oil Products Supply Report within the country’s PDE 2035 plan.
The release comes days after Mines and Energy Minister Alexandre Silveira supported President Luiz Inácio Lula da Silva’s veto of a measure that would have changed the reference price for domestic crude — a change sought by private refiners but firmly rejected by Petrobras and independent producers. The veto, seen in the market as an upstream victory, signaled the government’s unwillingness to adopt pricing rules that could impact investment signals.
Refining Capacity Expands, but Diesel Will Remain a Structural Bottleneck
The PDE 2035 projects a 10% expansion in Brazil’s refining capacity between 2025 and 2035 driven by the long-awaited second train at RNEST, the integration of the Boaventura energy complex, and upgrades to hydrotreating and distillation units across the system. These additions will help narrow imbalances but won’t fully eliminate them: net diesel imports are expected to reach levels close to one-quarter of national demand by 2035.
By contrast, dependence on imported naphtha is set to drop from 59% to 29%, the share of imported jet fuel to fall from 18% to 4%, and LPG to move into a stable surplus before the end of the decade. Gasoline is also expected to reach structural self-sufficiency as consumption stagnates and ethanol blending rises.
Crude Exports Rise as Brazil Solidifies Its Global Role
On the upstream side, Brazil’s shift toward a global exporter accelerates. The country is expected to ship roughly 2.7 million barrels a day of crude in 2035 — more than half its projected production. Silveira said the new PDE provides the predictability needed for long-term investment while avoiding sudden regulatory changes that could distort the economics of refining and upstream development.
Petrobras is already running its plants near 90% utilization, and new investments continue to favor middle distillates given the lighter quality of pre-salt crude. RNEST’s expansion is expected to boost domestic output of naphtha and jet fuel, while Boaventura should reshape margins by processing intermediate streams from Reduc and increasing LPG production via expanded natural-gas processing.
Logistics and Regional Imbalances Remain a Challenge
The PDE warns that logistics will become a focal constraint, with the São Paulo–Brasília and Paraná–Santa Catarina pipelines projected to reach saturation during the decade. Without new infrastructure or operational gains, regions such as the North, Northeast and Center-West will remain structurally short of fuels, relying on coastal shipping, road transport and imports. Even so, rising domestic output, a shift in the product slate and expanded gas processing point to gradually lower exposure to international volatility.
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