LatAm Oil & Gas: 2Q26 Preview: Fuel Distribution > Integrated Companies > JRs

Research evidence excerpt

LatAm Oil & Gas: 2Q26 Preview: Fuel Distribution > Integrated Companies > JRs

J P M O R G A N Latin America Equity Research

29 July 2026

LatAm Oil & Gas

2Q26 Preview: Fuel Distribution > Integrated

Companies > JRs

We enter 2Q26 constructive on the sector, with global oil market volatility Latam Oil, Gas & Petrochemicals

ACproviding tailwinds through three top-down drivers: stronger Brent prices, the Milene Clifford Carvalho

main positive driver for oil-exposed names (Brent up 23.3% q/q to $97/bbl); a (55-11) 4950-3475

constructive crack spread backdrop, supported by strong Northern Hemisphere milene.carvalho@jpmorgan.com

seasonal demand and lingering uncertainty over the extent of refining capacity Rodolfo Angele, CFA

damage in the Middle East and Russia (LatAm Oil & Gas US Energy Trip (55-11) 4950-3888

Feedback: Discipline Over Conviction); and a constructive margin environment rodolfo.r.angele@jpmorgan.com

for Brazilian fuel distributors, which continue to benefit from competitively priced Henrique Cunha, CFA

supply through higher Petrobras quotas. In this context, (a) fuel distributors remain (55 11) 4950 3623

henrique.r.cunha@jpmorgan.com

our top pick for the quarter. We expect another strong quarter for margins in Brazil Banco J.P. Morgan S.A.

(VBBR at R$430/m³ vs. UGPA at R$415/m³), supported by lower acquisition costs

from Petrobras, while elevated import costs continue to set the marginal fuel price

for consumers. We like both names and see a clear deleveraging trend across the

sector. For Ultra, we also highlight the potential for dividend distributions given

its underleveraged balance sheet, as discussed previously (Ultrapar Strong

Momentum Builds the Case for Dividends). (b) Our second preferred subsector is