Oil & Gas in Brazil Current Behavior Changes Analysis¶
Ongoing Behavior Changes¶
Analysis of the provided reports for 2024 and early 2025 reveals several ongoing behavior changes impacting relationships and demand within the Brazilian Oil & Gas value chain. These changes are observed in both Business-to-Consumer (B2C) and Business-to-Business (B2B) customer segments, primarily affecting the Downstream sector but with ripple effects throughout the chain.
In the B2C segment, a significant shift in automotive fuel consumption patterns is evident. While the total sales of automotive liquid fuels increased to 133.1 billion liters in 2024, indicating a growing overall demand likely influenced by an increase in licensed vehicles [Provided Context], there is a clear migration from gasoline to hydrated ethanol. Gasoline C sales decreased by 4% in 2024 compared to 2023, with a 4.5% drop in year-to-date sales until October 2024. [Provided Context] Conversely, hydrated ethanol sales saw a substantial 33.4% increase in 2024, and a 40.7% rise in year-to-date sales until October 2024. [Provided Context, 12] This behavioral change is primarily driven by the price competitiveness of ethanol relative to gasoline, highlighting consumer sensitivity to fuel costs. Demand for LPG from households also shows a growing trend, with sales increasing by 2.2% in 2024, indicating consistent or increasing demand for domestic energy needs. [Provided Context]
In the B2B segment, the demand behavior is more varied across different product types. The transportation and agricultural sectors, key consumers of diesel, contributed to a 2.6% increase in Diesel B sales in 2024. [Provided Context] This aligns with the increase in licensed heavy vehicles, such as an 8.5% rise in bus licensing in 2024. [Provided Context] However, demand for natural gas from industrial and power generation sectors showed a decrease of 3.5% in the first three months of 2024 compared to the 2023 average. [Provided Context] This suggests a potential shift or variability in energy source preference within these industrial segments, although the impending launch of LNG imports from Argentina and strategic partnerships aim to stabilize and potentially grow the natural gas market. The large number of service stations (44,678) and LPG resellers (58,283) at the end of 2024 represent a significant B2B customer base for fuel and LPG distributors, and their business volume is likely influenced by the overall trends in B2C consumption. [Provided Context]
Beyond direct consumption, the increasing focus on energy transition and decarbonization is influencing behavior across various B2B sectors. New legislation like the Future Fuels Law (Law No. 14,993/2024), enacted in October 2024, provides incentives for advanced biofuels, biogas, biomethane, sustainable aviation fuel (SAF), green diesel, and carbon capture and storage (CCS). This regulatory push is expected to drive changes in fuel and energy source adoption by transportation (including aviation), industrial, and potentially power generation sectors, shifting demand towards lower-carbon alternatives over time.
These behavior changes collectively indicate a market that is not only growing in overall volume for certain products (automotive fuels excluding gasoline, and LPG) but is also undergoing a qualitative shift driven by price sensitivity in the B2C segment and a nascent transition towards cleaner energy sources in the B2B segment, influenced by regulatory changes.
Table of Impact of Behavior Changes on the Value Chain¶
| Value Chain Segment | Impact of Behavior Changes | Impact on Relationships | Impact on Demand |
|---|---|---|---|
| Upstream | Increased demand for oil (for diesel production and overall fuel volume growth) and feedstock for biofuels (indirectly via Downstream demand). Potential impact on the composition of extracted hydrocarbons needed (more associated gas with oil production). Continued focus on pre-salt remains dominant. [Provided Context] | Sustained relationships between E&P companies (Petrobras, IOCs, Independents) and service providers for exploration and production activities, driven by robust overall production targets. [Provided Context, 7] Potential for increased collaboration or contract adjustments based on the specific crude oil characteristics required by refineries adapting to changing downstream demand. | Overall demand for crude oil remains strong due to increasing total fuel consumption and export opportunities. Demand for natural gas may see regional variations based on local market development and industrial/power sector uptake, despite a decrease in total demand in early 2024. [Provided Context] |
| Midstream | Increased volumes of crude oil and refined products to be transported due to higher production and overall fuel sales. [Provided Context] Potential strain on existing infrastructure capacity, particularly pipelines and terminals, if not expanded in line with production/demand growth. [Provided Context] | Strengthened commercial relationships between Upstream operators, Downstream players (refiners, distributors), and Midstream service providers (pipeline/terminal operators, shipping companies). Increased negotiation and competition for access to limited infrastructure capacity. [Provided Context, 1] Potential for new investment partnerships in logistics infrastructure. | Increased demand for transportation and storage services for crude oil and refined products. Variable demand for natural gas transportation depending on production, processing capacity, and downstream consumption patterns, which saw a decrease in early 2024. [Provided Context] |
| Downstream | Shift in B2C automotive fuel demand from gasoline to ethanol directly impacts refinery output requirements and distribution strategies. [Provided Context, 12] Increased overall volume of fuel sales requires efficient distribution networks. Growing LPG demand necessitates robust distribution and reseller networks. [Provided Context] Regulatory push for biofuels (Future Fuels Law) influences refining slate and blending requirements for diesel and gasoline. | Heightened competition among fuel distributors (Vibra, Raízen, Ipiranga) to capture market share, particularly in the ethanol segment. [Provided Context] Closer collaboration or potential tension between refiners and distributors regarding product supply mix (gasoline vs. diesel vs. feedstocks for biofuels). [Provided Context] Evolving relationships with B2B customers based on changing energy needs and the adoption of alternative fuels. | Increased demand for hydrated ethanol and Diesel B. [Provided Context, 12] Decreased demand for Gasoline C. [Provided Context] Growing demand for LPG. [Provided Context] Demand for specific refined products and feedstocks is increasingly influenced by biofuel mandates and the adoption of lower-carbon alternatives in B2B sectors. |
References¶
- Agência Brasil. https://agenciabrasil.ebc.com.br/
- World Oil. https://www.worldoil.com/
- Mordor Intelligence. https://www.mordorintelligence.com/
- Business Research Insights. https://www.businessresearchinsights.com/
- Argus Media. https://www.argusmedia.com/
- IMARC Group. https://www.imarcgroup.com/
- Offshore Magazine. https://www.offshore-mag.com/
- Stillwater Associates. https://stillwaterassociates.com/
- International Energy Agency (IEA). https://www.iea.org/
- International Trade Administration. https://www.trade.gov/
- Deloitte Insights. https://www.deloitte.com/insights/
- ICLG.com. https://iclg.com/
- Bloomberg Professional Services. https://www.bloomberg.com/professional/
- Edenred.com. https://www.edenred.com/