With the instability generated in the Strait of Hormuz due to the conflict in Iran, the Brazilian oil industry could benefit.
More than 10 thousand kilometers from Tehran, the capital of Iran, Brazil could become one of the potential “beneficiaries” of the conflict started in the Middle East after the attacks by the United States and Israel on Iran, on Saturday.
The attacks hit official buildings and civilian targets and killed the then supreme leader of Iran, Ayatollah Ali Khamenei. In addition to him, at least three other high-ranking Iranian government officials were also killed.
US President Donald Trump claimed that the attacks were aimed at eliminating “imminent threats from the Iranian regime“, that Iran would have tried to rebuild its nuclear program and would continue to develop a long-range missile program capable of threatening European countries and, in the future, the United States.
The Iranian regime refutes these accusations and claims that its nuclear program had peaceful purposes.
In response to attacks by the United States and Israel, Iran fired a series of missiles towards Israel and US installations located in Persian Gulf countries such as the United Arab Emirates, Saudi Arabia, Qatar and Kuwait.
On Monday afternoon, a spokesman for Iran’s Revolutionary Guard announced that the country would close the flow of ships through the Strait of Hormuz.
This passage is around 33 kilometers wide and receives an intense flow of oil tankers transporting oil produced by several Arab countries, as well as Iraq and Iran.
Matt Smith is a consultant at Kpler, one of the largest navigation data analysis firms in the world, and explains that the biggest buyers of oil that passes through the Strait of Hormuz are the Asian countriessuch as China, India and Japan.
“China alone consumes half of all the oil produced in the Middle East and a significant part of this is transported through the Strait of Hormuz. If the situation continues, China, no matter how much stock it has, will have to look for alternative supplies. And the Brazil is well positioned to meet this new demand and can become a viable option”, he explains.
Data from the Brazilian government indicate that the China is already the main destination of oil exported by Brazil. In 2025, Brazil exported 44 billion dollars in crude oil around the world. Of this total, 20 billion (45%) went to China.
The president of the Brazilian Petroleum Institute (IBP), Roberto Ardenghy, tells BBC News Brasil that It’s still too early to estimate whether the crisis in Iran will benefit the Brazilian oil industry.
However, if the scenario worsens or remains at current levels, the tendency is that Brazil could indeed be one of the potential beneficiaries.
“We don’t know how long the strategic stocks of the main countries will last. We calculate something around three or four months. If things continue like this, with the fall in stocks, countries like Brazil, Argentina, Nigeria and Equatorial Guinea will emerge as alternative suppliers for the oil trapped in the Persian Gulf”, says Ardenghy.
“The longer the crisis drags on, the more concerned consumers in Asia and Europe will become and they will have to look for new alternatives. Brazil, therefore, would not only benefit from selling to China, but also to Europe”, considers Smith.
Ardenghy warns of another factor that could limit how much Brazil can benefit or not from a change, even if temporary, in the global oil chain: the Brazilian production capacity.
According to him, Brazil produces, on average, 3.6 million barrels of oil per day and exports 1.6 million. The remainder is consumed by the domestic market itself.
By 2029, it is estimated that Brazil would be able to increase its production to 4.2 million barrels just based on ongoing projects, which could lead Brazil to reach the position of sixth largest oil producer in the world.
The potential increase in the price and demand for Brazilian oil has already been reflected in the share values of Petrobras and other Brazilian oil companies.
Petrobras’ preferred shares, for example, rose 3.57% between Friday and Tuesdayfollowing similar movements of oil companies around the world.
The expectation among investors is that the increase in the price of oil on the international market increase profit margins of these companies.
Analysts and the Brazilian government assess that the crisis in Iran and its impact on the oil industry could generate mixed effects on Brazil.
For the government, on the one hand, the increase in oil prices could increase the amount of dividends which it receives from Petrobras, since the federal government is the company’s main shareholder.
Furthermore, an increase in the price or exports of oil can also increase tax collection.
“The government will start raise more money due to the payment of oil royalties, special participations and the collection of taxes itself”, explains Ardenghy.
Speaking to the UOL portal, Treasury Secretary Rogério Ceron said that the crisis in Iran could have a positive effect on the Brazilian economy. This increase in the price of oil can, however, have negative effects such as inflationary pressure.
Roberto Ardenghy, from IBP, explains how the prolongation of the crisis could negatively affect Brazil.
“Brazil exports oil, but import gasoline and diesel. When there is a change in the level of oil prices, this affects the petrochemical chain. This will cause the refinery to increase the price of its products and this could have an impact on other sectors of the economy”, he states.
Both Smith and Ardenghy consider that the increase in demand for Brazilian oil should only materialize if the crisis in the Middle East takes time to be resolved.
“It is necessary that instability keep for at least four weeks so that we can see a change in the flow of oil purchases. If the Strait of Hormuz, for example, is reopened soon, we may not see this search for alternative partners at this time,” says Smith.
The analyst also says that the closure of Hormuz can be seen as a desperate move by the Iranian government, but that, in the long term, it tends to harm the country itself.
“Most of Iran’s oil exports also pass through there. Closing the Strait of Hormuz ends up harming Iran’s economywhose main source of income is, precisely, oil”.
Ardenghy also says that a long-term closure of the Strait of Hormuz is an unprecedented situation and will not occur without geopolitical reactions or pressures.
“There is a strategic interest from the superpowers to maintain the navigability of the Strait of Hormuz and one of the main interested parties is China, which will exert some type of pressure so that the situation is resolved”, he says.
