The increasing supply of non-conventional oil in the U.S. has changed the dynamics of crude oil market and the flow of oil products in the Atlantic Basin. The Gulf of Mexico (GoM) emerges as an exportation hub of oil products, contributing to a scenario in which gasoline prices tend to decline. Meanwhile, from 2010, the competitiveness of the Brazilian sugarcane ethanol has been ruptured by the country's gasoline price policy that had not followed international price parity. The political conjuncture of the U.S. incites high utilization rates of their refining system in the GoM. In this context the profitability of the ethanol business can be impacted in Brazil, by either the current policy of controlled domestic gasoline prices or a future scenario of declining gasoline international prices. Therefore, this study tests if this gasoline price scenario can compromise even more the competitiveness of the Brazilian ethanol. Particularly, for a scenario of falling prices, ethanol production in Brazil would be under strong pressure of gasoline supply coming from the U.S. This can impact Brazil's ethanol industry, whose development has been justified by climate change policies. In that sense, the paper also discusses the future opportunities and challenges for Brazil's ethanol industry. (C) 2016 Elsevier Ltd. All rights reserved.