Iran War Pulls Petrobras Into Brazil’s Inflation Battle

Latin America’s largest oil producer Petrobras is moving to contain war-fueled energy inflation in an election year, aligning with government efforts that could backfire and lead to diesel shortages in Brazil.

The state-controlled company is selling fuel below international prices, squeezing importers and contributing to a sharp drop in diesel inflows that could cause inventories to deplete. The Lula administration has also cut taxes and introduced subsidies for diesel in a contrast to countries such as Chile, which responded to the oil rally by sharply raising fuel prices.