Petrobras's (PETR3; PETR4) Strategic Shift: Brazil's Oil Giant Driving Energy Transition and Market Records

As Brazil’s stock market reaches a historic milestone, surpassing the 170,000-point mark on the Ibovespa, driven by a strong wave of foreign investment, Petrobras is standing at the center of this momentum. Operating at near-full capacity, the state-controlled oil giant has become a key pillar supporting investor confidence and market optimism.

Petrobras is not only benefiting from the current rally but actively shaping it through efficiency gains, record production levels, and a clear strategic shift toward cleaner energy.

Petrobras Refining at Near-Full Capacity Boosts Investor Confidence

The Ibovespa’s move above 170,000 points this Wednesday (21) was fueled by the strong performance of large-cap stocks, with Petrobras playing a central role. When Brazil’s main index climbs to record highs, it reflects confidence in both corporate earnings and the broader economy, and Petrobras’ operational strength is a major part of that equation.

Between 2023 and 2025, Petrobras refineries operated with an average Total Utilization Factor (TUF) of 92%, up from 88% in 2022. Over the same period, the company increased average oil product output by 3% and expanded S-10 diesel production capacity by more than 20%, adding 138 thousand barrels per day (kbpd).

These numbers clearly signal improvements in operational efficiency, asset optimization, and sustained investment in refinery modernization. The result has been a more resilient supply of high-quality fuels with a lower environmental impact.

S-10 Diesel Expansion Cuts Imports and Improves Air Quality

The expansion of S-10 diesel, Brazil’s lowest-sulfur diesel, was made possible through projects at the Reduc, Replan, Revap, and Rnest refineries. By boosting domestic output, Petrobras has reduced the country’s dependence on imports while also contributing to cleaner air, given the fuel’s lower sulfur content.

William França, Petrobras’ Executive Director of Industrial Processes, summarized the strategy clearly, and I agree with his assessment:

“The projects implemented in recent years have steadily increased the capacity and operational flexibility of our refining system. The expansions at our refinery units are the result of efficiency gains, process modernization, and applied engineering, always with a focus on safety and operational reliability.”

Efficiency gains have translated directly into new records. From 2023 to 2025, average diesel production rose 3.1%, while gasoline output jumped 9.3%, reaching historical averages of 419 thousand barrels per day of gasoline and 452 thousand barrels per day of S-10 diesel.

Petrobras Biorefining Strategy Strengthens Brazil’s Energy Transition

One of the most compelling elements of Petrobras’ long-term strategy is its advance in biorefining. The company’s refineries are already adapted to produce renewable diesel (Diesel R), with current capacity of around 74 thousand cubic meters per month. Petrobras already markets R5 diesel, widely used in public transportation fleets.

Looking ahead, the roadmap for sustainable fuels is becoming clearer:

• Sustainable Aviation Fuel (SAF): Petrobras refineries have been adapted through co-processing routes, allowing airlines operating in Brazil to begin using SAF from 2027, in line with the Future Fuel Law and the mandatory phase of Corsia, the ICAO emissions-reduction program.

• Dedicated Renewable Fuel Plants: The company is running a bidding process to build its first plant dedicated to 100% renewable fuels at the Presidente Bernardes Refinery (RPBC), with capacity of 15 kbpd.

• Pioneering Renewable Operations: By the end of the first quarter, Petrobras will begin operating at Refinaria Riograndense (RPR), the first refinery in Brazil to run entirely on renewable feedstock.

Offshore Investments: Petrobras Drives Decarbonization in the Naval Industry

Even as Petrobras accelerates its refining and biorefining transformation, its core oil and gas operations continue to drive major investments across Brazil’s industrial chain, especially in the naval sector.

Recently, Brazil’s development bank, BNDES, approved R$ 1.98 billion in financing for Bram Offshore Transportes Marítimos to build six hybrid offshore support vessels (PSV 5000 class). These vessels will operate under 12-year charter contracts with Petrobras, transporting supplies between offshore platforms and onshore bases.

The project is expected to generate 620 direct jobs during construction and features hybrid diesel-electric propulsion, battery banks, and shore power connection. From my perspective, this is a clear example of how Petrobras’ long-term operational demand is accelerating the adoption of cleaner, more efficient technologies throughout its supply chain.

How Petrobras Is Shaping Financial Markets While Driving Brazil’s Energy Transition

Taken together, these developments reinforce Petrobras’ dual role in Brazil today. On one hand, the company is delivering strong operational results with near-full refinery utilization, record fuel production, and reduced import dependence. All of this helps sustain the historic rally in the Brazilian stock market. At the same time, the company is steadily advancing toward a more diversified, cleaner, and more sustainable energy matrix. 

From refining efficiency to biorefining leadership and green investments in offshore logistics, Petrobras is not merely adapting to the energy transition, but actively shaping it, while helping anchoring investor confidence in Brazil’s economy.