Petrobras Says It Can Reduce Impact Of High Oil Prices In Brazil

By Lucas Pordeus Leon

Petrobras announced it can reduce the impact of high oil prices in Brazil while maintaining the oil giant’s profitability.

“In a scenario where wars and geopolitical tensions increase the volatility of the international energy market, Petrobras reaffirms its commitment to mitigating these effects on Brazil,” the state-owned company told Agência Brasil.

Petrobras added it is possible to reduce the effects of global inflation resulting from high oil prices because the company has begun to consider “the best refining and logistics conditions” in its commercial strategy.

“This allows us to promote periods of price stability while safeguarding our profitability in a sustainable manner. This approach reduces the immediate transmission of international variations to the Brazilian market,” the statement reads.

The oil giant further stated that, for competitive reasons, it cannot disclose any future decisions, but remains committed to acting in a “responsible, balanced, and transparent manner for Brazilian society.”

Oil price hike

The war in Iran and the closure of the Strait of Hormuz in the Middle East, through which nearly one quarter of the world’s oil passes, have driven up the price of a barrel on the global market, reaching USD 120 on Monday (Mar. 9).

However, after US President Donald Trump said the war was nearing its end, prices fell again, and today Brent crude is trading below USD 100 – still above the average price of USD 70 before the conflict.

After the markets closed, Trump again threatened Iran yesterday with attacks “20 times stronger” that “will make it virtually impossible to rebuild Iran as a nation” if Tehran continues to block the strait.

Pricing policy 

Ticiana Álvares, technical director of the Institute for Strategic Studies in Petroleum (INEEP), pointed out that Petrobras’ ability to mitigate, at least in part, the effects of high oil prices is possible because the company abandoned its international price parity policy in 2023. This policy dictated resale in accordance with global prices.

“Petrobras’ policy followed international prices 100 percent. This policy has changed and now takes internal factors into account. That’s the leeway Petrobras currently has,” the expert said.

Despite this room for maneuver, Ticiana added that Petrobras’ action has a limited and temporary effect, especially because Brazil is still a major importer of derivatives such as gasoline and diesel.