Brazil’s Petrobras monitoring Russia-Ukraine crisis

RIO DE JANEIRO, BRAZIL – Petrobras’ Executive Director for Marketing and Logistics Cláudio Mastella said yesterday, February 24, that the company is monitoring the development of the crisis between Russia and Ukraine, which, so far, is restricted to the region.

He considered that there will be no impact on service to customers in Brazil, supplied by refineries in the country and by imports from other areas in the world.

However, Mastella foresees a very strong impact on the volatility of prices in the market. “There was a peak today that hasn’t stabilized yet. The whole market is watching the developments and trying to assess the consequences of the crisis, starting from the unfolding of the situation in Ukraine,” he said.

Refining and Natural Gas Executive Director Rodrigo Costa agreed with Mastella’s position. He said Petrobras is monitoring all developments involving liquefied natural gas (LNG) supplies from the United States to Europe, Africa and Asia, as a result of the crisis between Russia and Ukraine, given that a significant portion of gas imported by Brazil comes from the United States.

However, he said that the company sees no risk in the transport of cargo to meet contractual commitments. “What we do see is a very significant impact on costs, because we already see LNG pricing movements returning to US$300 a barrel. Extremely high prices, which add a greater burden to the cost of regasification.”

Costa does not foresee any problems in the availability of cargo. With the recovery of reservoirs, he believes that there is no need for increased imports to supply the thermoelectric and non-thermoelectric market in Brazil.