The US-Iran conflict is expected to increase international distillate prices, bringing a halt to diesel purchases in the Brazilian spot market and reduce clean fuels imports, according to market participants' initial assessments.
After the start of US and Israeli military attacks against Iran on 28 February, Nymex heating oil future contracts with April settlement rose by over 12pc. As result, diesel prices offered today at Brazilian ports more than doubled compared to 27 February levels. Argus' indicator for imported 10ppm (S10) diesel jumped to a premium of R780/m³ (46¢/USG) in the northeastern Itaqui port, in Maranhao state, from Sao Luis values, compared to a premium of R335/m³ in the last session.
Participants believe that spot market negotiations — which were already limited by closed arbitrage for importing foreign diesel — will practically halt for now, and distributors will try to take advantage of the beginning of the month to increase their withdrawal quotas from state-controlled Petrobras.
The measure will not be enough to meet domestic demand for long, since Brazil is not self-sufficient in diesel. Buyers will need to decide to return to purchases through the open book model or the spot market likely next week, a trader said.
Brazil imported approximately 24.7bn l (425,600 b/d) of diesel in 2025, according to trade ministry Mdic data. The volume accounted for around 40pc of national demand for unblended diesel, according to energy research bureau Epe.
Some importers also demonstrated lower appetite for foreign product purchases because of high rollover costs between Nymex contracts, reflecting a pronounced backwardation.
The cost of replenishing Russian diesel at the Itaqui port is around R700/m³ above Petrobras' prices in Sao Luis, considering the Argus indicator for Russian diesel on a dap Brazil basis for the week ended 27 February.
Gasoline impacts
Impacts on the Brazilian gasoline market are expected to be smaller, as the country is less dependent on imports and domestic market prices are regulated by Petrobras.
Brazil imported approximately 3.7bn l of gasoline in 2025, Mdic data shows. This represents about 10pc of national demand for unblended gasoline, according to EPE's projections last year.
But prices for imported gasoline offered at Brazilian ports also doubled from 27 February, according to market participants. Offers were reported at a premium of R390/m³ to the Paulinia reference price, compared with premiums of R150/m³ offered in the previous session.
The cost of replenishing gasoline at the northeastern port of Suape, in Pernambuco state, and another port in the northeast, is about R200/m³ above the reference price in Ipojuca, based on the Argus gasoline dap Brazil indicator for 27 February.
