Black Monday for Petrobras in the financial markets. The Brazilian oil company’s stock collapsed more than 7% on the São Paulo Stock Exchange on Monday, after Jair Bolsonaro criticized the company’s pricing policy in the face of war-torn crude prices. Ukraine.
The Brazilian president, who has a habit of targeting the state oil company every time it raises prices, said the “parity with the international price” of oil “cannot continue”. This collapse due to the nervousness of investors dragged down the Ibovespa index, the main index of the São Paulo Stock Exchange, which closed down 2.52%.
Elections in sight
Bolsonaro met with specialists on Monday afternoon to discuss a solution to the expected impact on fuel prices – estimated at 30% – in the context of the escalation in international oil prices following the Russian invasion of Ukraine. He is seeking to stop the transfer of these increases by Petrobras to Brazilian consumers, before the October elections, where he will run for a second term.
Discussions in Washington around a possible embargo on all Russian oil exports have led to an unprecedented surge in oil prices on the markets. On Monday, the barrel of Brent, the European benchmark for oil, took up 17.8% to reach 139.13 dollars, not far from its historical record of 2008 (147.50 dollars). WTI, the American benchmark, followed the same trend, rising 12.81%, before losing some of its gains.
The Brazilian government is evaluating different alternatives: asking Petrobras shareholders to suspend price adjustments during the conflict, the withdrawal of certain federal taxes or a possible fuel subsidy, which would come on top of already high public spending. In 2021, fuels accumulated an increase of almost 50%, which brought general inflation above 10%, the highest since 2015.