Crisis in the Middle East destabilizes fuel prices and even ethanol starts to pay for the high price of a barrel of oil
The crisis in the Middle East, which stems from the war between Iran, Israel and the United States, has already directly affected the world oil market, since the largest oil crossing, the Strait of Hormuz, is closed, compromising the flow of 20% of all oil produced in the world. The situation, which increased the price of a barrel of oil, registered an increase of R$ 0.57 in the cost of gasoline in Belo Horizonte, and caused ethanol to follow this value.
Widely used in Brazil, not least because it was here that green fuel was developed to fuel vehicles, ethanol’s main advantages are to reduce dependence on fossil fuels, such as oil, and to be less polluting, since planting neutralizes emissions from burning in the engine.
The production of ethanol has no direct link with the extraction of the oil, if at all in the machinery used in planting and harvesting, but which does not directly impact the price of the liter. But why, then, does the price of ethanol rise if the fuel does not contain petroleum in its composition?
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The economist and academic coordinator of the MBA at Fundação Getulio Vargas (FGV), Mauro Rochlin, clarified, in an interview with AutoPapo, that the increase in the prices of ethanol and other fuels along with gasoline is nothing more than a matter of demand.
Basically because of what we call, in economics, cross-demand. As ethanol is a substitute fuel for gasoline, when gasoline rises a lot in price, consumers tend to migrate to ethanol, which becomes relatively cheaper. With the increase in demand for ethanol, by the law of supply and demand, the price also rises. That’s it, simple as that! In addition, cars can use both ethanol and gasoline, or even a mixture of the two, which facilitates this migration of consumption”, said the professor.
As a result of this factor, the increase in the price of ethanol has followed the price of gasoline in recent days.
The barrel of Brent oil — one of the world’s main price references for crude oil — registered a 48% increase last week, trading for around US$ 106. Year-to-date, the appreciation exceeds 76%.
These results caused increases that raised the price of gasoline to more than R$ 7 per liter in several states of Brazil in recent days. The country’s average, between 03/08/2026 and 03/14/2026, was R$ 6.46, according to Petrobras.
For the price of ethanol, according to the ANP (National Agency of Petroleum, Natural Gas and Biofuels), the average value in Brazil is 70% of the cost of gasoline, that is, for a liter of gasoline at R$ 7, the same amount of ethanol would cost about R$ 4.90.
According to Professor Rochlin, other countries that use alternative fuels to oil also suffer from the increase.
“In the case of Brazil, ethanol is more relevant because we are large producers and consumers, and a good part of the fleet is flex. In the United States, for example, biofuel is produced mainly from corn. In other words, the economic logic is similar: when a fuel becomes more expensive, the demand for substitutes increases. In the United States, probably, the price of corn is also being pressured,” he says.
Just as the United States is subject to an increase in the prices of corn and derivatives, here the same happens with sugar.
“Sugarcane mills can alternate production between ethanol and sugar. If ethanol becomes more profitable, production tends to migrate to it, reducing the supply of sugar, which can put pressure on its prices,” added Professor Mauro Rochlin.
Also according to economist Mauro Rochlin, oil is the main source of energy in the world, and its price depends a lot on global supply. This supply is influenced by logistical and geopolitical factors, such as transport in strategic regions – for example, the Strait of Hormuz. Therefore, any prediction depends on the development of events in the Middle East. It is a very uncertain scenario.
But what draws attention is that a large part of this increase at the pumps has been treated by the National Petroleum Agency (ANP) as abusive. This is because the fuel that is currently at the stations was refined before the price hike. And Brazil is more dependent on diesel imports than on gasoline. Today about 30% of diesel comes from abroad, while in the case of gasoline, it is 10%, according to Minaspetro. Thus, the agency investigates abusive practices by merchants.
