Good morning! Iran ships stranded on the Brazilian coast. A new round of cuts to the federal budget. Will truckers go on strike again? The president moves to permit illegal mining. Enjoy your read.
Case of Iran ships shows Brazil’s alignment to the U.S.
Since Friday, Brazil’s state-owned oil and gas company Petrobras has been refusing to sell fuel to four Iranian ships located on the coast of the state of Paraná, due to U.S. sanctions against the Middle-Eastern country. In a note to investors, the company explained that, should it provide fuel to the vessels, it would be penalized due to its U.S. operations. Petrobras said other companies could provide fuel to the Iranian ships—though the state-owned company maintains a de facto monopoly in fuel distribution. The vessels, which are transporting urea, were set to leave for Iran with a corn shipment.
Why it matters. Since taking office, President Jair Bolsonaro has adopted a position of alignment with the U.S. Iran, however, is an important export market for Brazil’s agribusiness sector (and is the biggest buyer of Brazilian corn). In 2018, it accounted for USD 2.2bn in direct imports, and an additional USD 2bn in indirect imports—representing the 6th-largest...