Brazilian state-run oil firm Petrobras sees oil prices under pressure due to the conflict in Iran, but does not usually pass through sudden volatility to the domestic fuel market, its chief executive officer said on Monday.
Global oil prices jumped after Iran's retaliatory attacks disrupted shipping through the Strait of Hormuz, following weekend strikes by Israel and the US that killed Iran's Supreme Leader Ayatollah Ali Khamenei.
Petrobras is monitoring the consequences of the conflict in the Strait of Hormuz, Chief Executive Magda Chambriard said in an interview. "It increases oil prices, for sure, but Petrobras historically does not pass through sudden oil prices volatility."
Earlier in the day, Reuters cited sources saying Petrobras was closely monitoring the fallout from the conflict in Iran and expects to watch oil prices for the next week before taking decisions on fuel prices.
Brent crude rose as much as 13 per cent on Monday before settling up 6.7 per cent, boosting the shares of Petrobras, which also exports crude, by more than four per cent.
A shutdown of the Strait of Hormuz would significantly affect global oil flows and could force a major reshuffling of shipping routes. Petrobras could benefit on one hand, but it might also need to buy potentially more expensive crude and derivatives from other regions.
Petrobras imports daily volumes of crude to blend with its own production. Still, Petrobras' executive director of logistics, commercialisation and markets, Claudio Schlosser, said the company has alternatives and flexibility to operate competitively despite the Middle East conflict.
"Petrobras has alternative routes outside the conflict zone, which gives us security and competitive costs for our operations, preserving our margins," Schlosser said. He declined to comment on potential changes to Petrobras' fuel prices.
Most imports come from outside the crisis region, he said, adding "the few that do exist can be redirected."
(Reporting by Rodrigo Viga Gaier; Writing by Oliver Griffin; Editing by Roberto Samora, Andrea Ricci and Chris Reese)
