The strategic chokepoint of the Strait of Hormuz remains central to market volatility. Prior to hostilities, 20% of global oil and gas production transited the maritime passage south of Iran. Reduced petroleum availability in international markets triggered price escalation affecting Brazil despite domestic production capacity, as crude oil and derivatives follow commodity pricing determined by global benchmarks.
Petrobras pricing volatility throughout 2026 reflects shifting conflict dynamics. April witnessed a 55% increase followed by 18% in May, prompting the state company to introduce installment options for distributors facing cash flow pressure. Brief price reductions occurred in June and July during diplomatic negotiations between the US and Iran, but August reversed course with a 1.9% increase preceding September’s double-digit adjustment.
The company employs a contractual parametric formula designed to cushion short-term fluctuations, producing more moderate adjustments compared to international market swings. Monthly pricing reviews on the first day of each month govern distributor contracts. The September restart of the installment program allows distributors to spread the increase across three monthly payments while Petrobras guarantees full volume fulfillment of distributor requests.
Petrobras controls approximately 85% of Brazilian aviation kerosene production through refinery output and imports, with the remaining market open to competitive producers and importers. The distribution chain flows from Petrobras to distributors who transport fuel to airlines and final consumers at airports or through resellers.
This article was curated and published as part of our South American energy market coverage.
