Fiscal impact of the oil shock

BRAZIL ECONOMICS - Report 23 Mar 2026 by Alexandre Schwartsman, Cristina Pinotti and Diego Brandao

The increase in oil prices triggered by the conflict in Iran has significant fiscal repercussions for Brazil, given the weight of the sector in the economy. The revenue impacts occur mainly through royalties and special participation charges on oil exploration, through corporate taxes on the sector’s profits (IRPJ and CSLL), and through Petrobras dividends. Our estimates indicate that a permanent 10% increase in the Brent price would raise the federal government’s net revenue by approximately R$ 11 billion over 12 months. The net effect on public finances, however, remains uncertain and will depend on the duration and developments of the conflict, its repercussions on oil prices, and the spending arising from government measures adopted to mitigate the shock’s impacts on the economy.

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