Why Brazil Is One of the Countries Least Affected by the Iran War

Since 28 February 2026, when United States and Israeli strikes opened the war on Iran, and 4 March, when Iran closed the Strait of Hormuz, the world has been living through what the International Energy Agency calls the largest supply disruption in the history of the oil market. Brent crude went from US$72 a barrel on 28 February to US$112 by 27 March, and in the first week of September it was still above US$96 after a fresh exchange of strikes. Europe postponed interest-rate cuts, Asian refiners went looking for any barrel that did not have to pass the Gulf, and fertiliser prices rose by up to 40 percent in three weeks.

Brazil is one of the large economies least affected by it. President Lula said as much when he opened the Hannover Messe in April, and the claim has been repeated often enough that it is worth setting out what the numbers actually show, including the one area where Brazil is exposed.

Brazil sells what the world is short of

Brazil produces about four million barrels of oil a day. Kpler puts output at 4.06 million barrels a day between January and May 2026, against 3.77 million in 2025, and none of it transits the Strait of Hormuz. That has made Brazilian crude the barrel Asian refiners reach for when Gulf supply is uncertain.

Asian countries imported about 1.2 million barrels a day of Brazilian crude in 2025. Between January and May 2026 that rose to roughly 1.8 million. China's purchases went from about 704,000 barrels a day in 2025 to 1.316 million; India's from about 100,000 to 238,000, and in April Brazil became India's fourth-largest supplier. Petrobras has redirected exports accordingly, with more than 60 percent of its shipments now going to China.

The effect on the trade balance was immediate. Brazil recorded a trade surplus of US$14.2 billion in the first quarter of 2026, a record for the period and 47.6 percent above the first quarter of 2025. Crude exports rose 31 percent to US$12.56 billion, with China taking 57 percent of them. The Ministry of Finance estimates that Brent at US$100 a barrel produces revenue equivalent to almost one percent of GDP above what the 2026 budget assumed.

None of this makes Brazil a replacement for the Gulf. Kpler's own analyst is clear that production has risen only marginally since March and that the Brazil-to-China voyage takes about fifty days. What it does make Brazil is the marginal supplier the world turns to in a disruption.

The pump price is a Brazilian problem with a Brazilian answer

Brazil is not immune at the pump. It still imports roughly 30 percent of the diesel it burns, because refining capacity has not kept pace with production; Petrobras has set full diesel self-sufficiency as the target for its 2027 to 2031 plan. When Brent doubled, Brazilian diesel followed.

Two things blunted the shock. The first is structural: since August 2025 Brazilian petrol has been blended at 30 percent ethanol and diesel at 15 percent biodiesel, both produced domestically, which is why biofuels were on the agenda when Chancellor Merz and Lula opened the fair in Hannover. The second is fiscal: the government is spending up to R$2.9 billion a month subsidising petrol and diesel, and Petrobras had received R$6.9 billion of diesel subvention by mid-August. The result is that Brazilian pump prices rose about 10 percent in the first weeks of the war, against 30 to 40 percent in the United States.

The macro picture held. Twelve-month inflation was 4.44 percent in July 2026, back inside the central bank's target band, and the Central Bank cut the Selic rate to 14.00 percent in August. It was cutting rates in the same months the European Central Bank was postponing its own cuts because of the war.

Geography

Brazil's ports and airspace have not been touched. Its direct routes to North America and Europe do not cross the conflict zone, its territory hosts no foreign military bases, and it has no military role in the war; Lula has criticised it publicly, at Hannover and elsewhere. The Gulf is more than 10,000 kilometres from São Paulo.

That distance is worth more than it sounds. The Middle East Council on Global Affairs has said the war has "irreversibly shaken" the idea of the Gulf as a permanently safe place for expatriates and their money. Brazil's expatriate and investor communities have not faced a comparable disruption.

Where Brazil is exposed: fertiliser

The exposure is in agriculture. Brazil is the world's largest fertiliser importer, bringing in about 46 million tonnes in 2025 and covering more than 85 percent of its consumption from abroad. Roughly half of those imports normally transit the Strait of Hormuz, and 28 percent of Brazil's nitrogen fertiliser imports came from Gulf countries in 2023.

Urea prices jumped when Iranian cargoes were stranded, and analysts at North Dakota State University estimate that a closure lasting through the end of 2026 would cut Brazil's urea imports for the April 2026 to March 2027 year by about 27 percent. IFPRI's reading is that farmers will respond as they did in 2022, by cutting application rates and shifting toward less input-intensive crops such as soybeans, and that global grain supplies are ample enough that food prices have so far stayed muted. Brazil has been negotiating urea purchases from Indonesia to fill part of the gap.

This is a risk to the 2026/27 harvest and to farm margins. It is not a risk to the daily life of someone living in Brazil, and it is the reason the title says "one of the least affected" rather than "unaffected".

What this means if you are deciding where to hold residency

The same six months put pressure on several of the alternatives investors weigh Brazil against. Gulf residency was tested by the strikes themselves, European programmes by the energy shock, and the Caribbean passport programmes by the European Commission's June letter on visa-free access. Our view is that a second residency should not depend on the world staying calm.

Brazil is a continent-sized democracy that produces its own energy and most of its own food, in a region without interstate wars, and it admits foreign investors to permanent residency from the day the authorisation is issued. More than 2,750 investors from more than 85 countries have used the three investment routes since 2018; the counts by route, year and country of origin are on our data pages, read from the government's own publications.

The routes are startup investment, company investment and real estate. Brazil does not sell citizenship; permanent residents become eligible to naturalise after four years, and the dual-citizenship post sets out how that works. If you want to know which route fits your situation, book a consultation.