The Brazilian oil industry is facing a period of uncertainty after shipments to the US were suspended following President Donald Trump's announcement of a 50% tariff on Brazilian exports, reported Reuters, citing sources.

Brazilian Petroleum and Gas Institute (IBP) president Roberto Ardenghy was quoted as saying: “Business involving cargo that has to leave Brazil for the US is suspended.”

The IBP represents major oil companies in Brazil including Petrobras, Shell, TotalEnergies, ExxonMobil and Equinor.

Oil, Brazil's top export to the US, was previously exempt from a 10% tariff imposed in April.

However, with the new tariffs set to come into effect soon, companies are unsure if oil will retain its exemption with Ardenghy having expressed that they have no way of knowing.

The industry is now considering redirecting shipments to Europe and India, but for the moment, operations are on hold until the situation becomes clearer.

Considering the impending tariffs, companies have opted to store oil on floating production vessels or cargo ships instead of proceeding with exports to the US.

Ardenghy noted that due to the 21-day transit time for shipments to reach the US from Brazil, operations were stopped to prevent cargoes from being caught up in the new tariff regime.

Petrobras, the state-run oil company, disclosed that approximately 8% of its oil exports in the second quarter were sent to the US.

Petrobras CEO Magda Chambriard recently mentioned the company's contingency plans to potentially redirect oil it sells to the US, sending more to Asia and Pacific markets should higher tariffs be imposed.

In a related development, President Trump is considering repealing restrictions on oil drilling in Alaska's National Petroleum Reserve.

Interior Secretary Doug Burgum announced the policy shift at a town hall in Utqiagvik, Alaska, indicating a drive towards increasing crude production from the reserve and a broader commitment to energy development in the region.