Latin America has been reducing its dependence on refined products from the USA since the beginning of the COVID-19 pandemic. This shift is due to weaker overall demand, Russian diesel replacing US-origin barrels in Brazil, and refinery upgrades reducing the need for imports in Chile, Colombia, and Peru. This finding was published this week by S&P Global.

Latin America and the Caribbean imported 77.6 million barrels of refined products from the USA in March, a 2% decrease from the previous month and an 18% drop from the previous year. This is the lowest volume since April 2023, according to data from the US Energy Information Administration released at the end of May. However, the USA exported 198 million barrels to all countries in March, the third highest amount thanks to increased LPG exports, such as propane and butane, to Asia.

The percentage of US exports to Latin America fell four points to 39%, the lowest since 38% in May 2020 and, before that, dating back to the recession months of 2008 and 2009. Latin America used to import half of all US products before Russia’s invasion of Ukraine, including a record 99.4 million barrels in August 2022. Russian diesel has almost completely displaced US barrels in Brazil’s import needs, with only 138,000 barrels—half a cargo—coming from the USA in March, the first time since 2015 that no full cargoes arrived from the USA.

Brazil has a continued need for diesel cargoes, but reverting back to the USA would only add three percentage points to the US-origin volume for Latin America.

Mexico led all countries in imports of US products with 35.8 million barrels in March, an 11% increase from February but a 19% decrease from imports in the same month last year. Brazil typically held the second position but fell to fifth place with 3.27 million barrels, a 41% drop from the previous month and a 38% drop from the previous year, reaching its lowest level since October 2015. Most of Brazil’s imports from the USA consist of naphtha and petroleum coke.

Chile jumped to the second position in US product imports in March, increasing cargoes by 15% for the month to 6.12 million but 27% below year-ago levels before completing extended planned work at two refineries. Guatemala ranked third with 3.45 million in US imports, almost the same as the previous month but a 30% drop from last year. Panama, a storage hub, was fourth with 3.39 million, a 9% increase for the month and a 24% decrease for the year.

Peru was sixth with 2.86 million barrels, a 3% decrease for the month and a 13% drop for the year. In December 2023, Peru fully operationalized the delayed $5.3 billion expansion of its 95,000 barrels per day Talara refinery. Ecuador was seventh among importers with 2.66 million barrels, the Dominican Republic eighth with 2.57 million barrels, Honduras ninth with 2.47 million barrels, and Colombia tenth with 2.3 million barrels.