Brazil's Petrobras holds off on fuel price hike amid Iran tensions, sources say

By Rodrigo Viga Gaier

RIO DE JANEIRO, June 23 (Reuters) - Brazil's Petrobras PETR4.SA is closely monitoring geopolitical tensions in the Middle East, which have pushed global oil prices higher in recent weeks, but does not plan to tweak domestic fuel prices for now, two company sources told Reuters on Monday.

The sources, speaking on condition of anonymity, said that the state-run oil giant is waiting for a sustained shift in Brent crude prices before considering any price changes.

Global benchmark Brent prices LCOc1 oscillated on Monday, touching a five-month high before falling 1% to $76.31 a barrel as markets tried to gauge the impact on transit of oil and gas via the Strait of Hormuz after U.S. airstrikes against Iran.

"Everyone is concerned about the geopolitical situation," one of the sources said. "But with our pricing policy, we've removed the need to react to short-term volatility. We don't need to rush into making price tweaks."

If Brent prices rise and stand above $80 for an extended period, a tweak may be needed, one source noted. The other added that current prices were largely driven by political tensions and could fall back to around $65 if the situation eases.

Petrobras declined to comment.

The firm in 2023 ditched a more market-based pricing policy in favor of one that gave it more flexibility to smooth out price swings, while still taking into account factors such as global crude prices and the foreign-exchange rate.