Driven by a 60% surge in oil prices, Brazil makes a bold $11.5 billion bet on biofuels, with energy sovereignty becoming a key strategy

⑴ Brazil's Grupo Potencial plans to increase its biofuel investment by approximately 60% by 2030, reaching 6 billion reais (about 1.15 billion USD). The company's executives have explicitly stated that the surge in oil prices triggered by the Iran war is one of the key factors behind this expansion plan. ⑵ The company's vice president pointed out that the near shutdown of the Strait of Hormuz directly led to a spike in oil and fuel prices, while Brazil relies on imports for 25% to 30% of its fossil diesel, making the risk of fuel shortages "significant." Increasing the bio-diesel blend ratio can effectively reduce this risk. ⑶ According to the expansion plan, the company's corn ethanol plant will reach an annual output of 1 billion liters by 2030, while the annual production capacity of bio-diesel is expected to nearly double to 1.65 billion liters by early next year. These two capacity expansion plans represent an increase of 2.3 billion reais over the previous investment outlook. ⑷ From a trading perspective, geopolitical conflicts' impact on traditional energy supply chains is reshaping the global energy investment landscape. The expectation that crude oil prices will remain above 100 USD per barrel for the long term is providing predictable profit support for alternative energy projects. ⑸ Currently, the legal blending ratio in Brazil is 15% bio-diesel in diesel and 30% ethanol in gasoline. The company believes there is room for the government to raise these ratios and stressed that "bio-diesel and ethanol are guarantees of national energy sovereignty," reflecting that energy security is becoming the core driving force behind investment decisions.