Petrobras engineers dispute consequences of the war on fuels

The vice-president of the Association of Petrobrás Engineers (AEPET), Felipe Coutinho, said this Friday (20) that the Brazilian fuel market is well positioned to deal with the consequences of Israel’s war against Hamas and the risk of shortages or rising fuel prices. It was a reaction to statements by the president of the state-owned company, Jean Paul Prates, about possible impacts of the conflict on the Brazilian market.

Prates stated, in statements throughout the week, that the war is taking place in a region of less importance for the world’s oil supply. He also mentioned that a possible spread of the conflict, involving other Middle Eastern nations, could have an impact on oil supply.

Last Wednesday (18), Prates said that, if other countries in the Middle East enter the conflict, a “perfect storm” could be formed for fuels. The price of oil has been fluctuating since the start of the war, and reached US$92 during the week, but closed on Friday (20) at US$88 on the international market.

However, the vice-president of AEPET highlighted that Brazil has a surplus in oil production, exporting 1.5 million barrels daily, which represents around 45% of national production. He emphasized Brazil’s refining capacity, in line with the demand for fuel-derived products in the country.

“Brazil is, in fact, surplus in oil production and has a refining capacity that is in line, very close, with the demand capacity for fuel products in Brazil. A need for residual imports, if it happens, can be done by Petrobrás,” he stated in a video published on social media (see in full).

He argued that Brazil is well positioned due to its self-sufficiency in oil production, refining capacity and the company’s ability to import fuel. “Petrobrás can guarantee supply to the national market at the lowest possible costs,” he added.

Coutinho also criticized Petrobrás’ new pricing policy, claiming that, despite the announcement of changes, the parity import pricing policy is still maintained in practice. He highlighted the need for greater transparency and coherence in the state-owned company’s communication about its pricing policy.

Last Wednesday (18), Prates acknowledged that fuel prices are high in Brazil, but that he is still following the rise in oil prices on the international market and the war in the Middle East.

He also said that Petrobras is “managing the crisis before this”, the end of the exemption from federal taxes such as PIS and Cofins in March and that, since then, the price has risen “due to several circumstances that were coordinated for this” .