First Read LatAm Oil & Gas US-Iran peace deal implications for LatAm upstream - part 2: is now for real?

Research evidence excerpt

First Read LatAm Oil & Gas US-Iran peace deal implications for LatAm upstream - part 2: is now for real?

Global Research

15 June 2026ab

First Read

LatAm Oil & Gas Equities

US-Iran peace deal implications for LatAm Latin America

upstream - part 2: is now for real? Oil Companies, Major

Tasso Vasconcellos

Analyst

tasso.vasconcellos@ubs.com

Our base scenario consider a US$80/bbl Brent in 2027 +55-11-2767 6683

Oil is trading down in the past sessions, following a new expectation of a definitive Joao Barichello

peace deal between the US and Iran. In our base scenario, we have Brent Associate Analyst

gradually decreasing from here, reaching an average of US$80/bbl in 2027, so joao-pedro.barichello@ubs.com

the recent performance on oil does not change our outlook on the investment +55-11-2767 6364

theses. Amid such volatility, we update our FCFE sensitivities for the upstream

players, reinforcing our preference for PRIO, followed by PETR, seeing the market

pricing in US$65-70/bbl for both. We continue to view the two as the most well

positioned players to capture potential upside from higher oil prices, while its

healthier balance sheet and low breakeven also provide support to the downside, in

case oil decline much further. We also flag PETR as having a stronger corelation to

Brent, with more implied technical risks in the current environment. This,

combined with PRIO having lower political noise/risks, specially in an election year,

further support our preference for the investment thesis.

PETR showing the strongest correlation to Brent

In the past cycles, we've noted that upstream players with the strongest cash

generation profile had the highest exposure to short-term volatility, which

remained true this time in 2026. We evaluated 4 different correlation windows this