Good morning! Today, a look at how the Ukraine-Russia conflict will affect Petrobras and Embraer, two staple Brazilian companies. And a window of opportunity for candidates to rally support.
Petrobras holding oil prices despite war
Though its prices are pegged to international rates, Brazilian oil and gas giant Petrobras has not announced new gasoline and diesel price hikes in the country for the last 50 days. During that span, Brent oil futures went up by 37 percent — meaning that Petrobras is selling diesel and gasoline 27 and 24 percent below import parity prices, per consultancy Stonex.
Why it matters. The state-controlled firm holds a de facto monopoly over refining in Brazil, which means that any pricing decision has massive effects on the domestic market. The company must strike a balance between defending value for shareholders and managing its impact on government policy and inflation.
What they’re saying. CEO Joaquim Silva e Luna told Reuters on Wednesday that the company is “studying” how long Petrobras can withstand the rise in Brent prices without making oil derivatives more expensive.
- Citing a “nervous” and “uncertain” market, the company head reiterated that a decision has not yet been made.
Pricing. Under Mr. Silva...