Cutting oil forecasts as Hormuz reopens; PBR, Vista and YPF preferred stocks

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Cutting oil forecasts as Hormuz reopens; PBR, Vista and YPF preferred stocks

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LatAm Oil & Gas

Cutting oil forecasts as Hormuz reopens;

PBR, Vista and YPF preferred stocks

Price Objective Change

Cutting oil forecast to US$82/bbl in 26 & US$70/bbl in 27 01 July 2026

The MoU signed by US and Iran has reopened the Strait of Hormuz. While it is unclear Equity

whether the arrangement will proceed smoothly, the newsflow has increased selling Latin America

pressure on Brent. The drop in oil prices has been concentrated in the front of the curve Oil & Gas

– with the current active contracts dropping to ~US$70/bbl levels. As BofA Global Caio Ribeiro >>

Commodity Research anticipated a few weeks ago, a full reopening of Hormuz could Research Analyst

mean Brent prices average US$82/bbl this year – therefore, the team has adjusted its Merrillcaio.ribeiro@bofa.comLynch (Brazil)

baseline forecasts to this level (for more details see Oil gets the memo). In this regard, Leonardo Marcondes >>

we are lowering the oil prices in our models – as well as our LT price to US$70/bbl from Research Analyst

Merrill Lynch (Brazil)

US$75/bbl – and, as a result, reducing most of the POs for LatAm E&P companies. leonardo.marcondes@bofa.com

Brazilian POs are the most impacted in this new update NicolasResearchBarrosAnalyst>>

Overall, we are reducing our POs by 15% on average for Brazilian stocks under our Merrill Lynch (Brazil)

nicolas.barros@bofa.com

coverage – Brava Energia, Petrobras, PRIO, PetroRecôncavo – since, other than the lower

oil prices, we are also incorporating a more appreciated BRL into our models (new FX of

5.00 for 2027E vs. 5.25 previously). We reiterate our Buy rating on Petrobras, as we

continue to see attractive FCFE/Div.