Oil prices appear to have settled into a range of $72 to $75 a barrel, although the market has yet to fully normalize and the conflict in the Middle East continues to create uncertainty, the chief executive officer of Brazil's state-run oil firm Petrobras.
Petrobras' decision to cut diesel prices for distributors, announced late on Tuesday, already reflects the decline in Brent crude prices, CEO Magda Chambriard said in an interview later that day.
"(The oil market) has not yet returned to normal, but $72-$75 does seem to be the new range," Chambriard said.
Petrobras announced a reduction of 0.3515 reais per liter in the price of diesel it sells to distributors, matching the amount of a government subsidy that is now being withdrawn. As a result, the company's selling price will remain unchanged.
The government's diesel subsidy, introduced to cushion the impact of the Iran war, expires on Wednesday, according to an announcement made on Tuesday by Finance Minister Dario Durigan.
He said other fuel subsidies currently in place are also being reviewed for gradual phase-out, following the decline in oil prices amid easing tensions in the Middle East.
Iran and the U.S. last month signed an interim accord that was meant to halt the war and reopen the Strait of Hormuz, through which about 20% of global oil supplies had passed before the conflict. The parties are also exploring negotiations aimed at reaching a permanent end to the war.
