Petrobras and Braskem Finalize $17.8 Billion Long-Term Feedstock Deal, Securing Brazil’s Petrochemical Supply Chain

Brazil’s state-controlled energy major Petrobras and Braskem petrochemical giant have finalized a set of long-term commercial agreements valued at approximately $17.8 billion, marking one of the most significant deals in the country’s industrial sector in recent years. The agreements conclude extended negotiations between the two companies and are designed to guarantee the supply of critical raw materials essential for petrochemical production across Brazil.

Under the new framework, Petrobras will supply Braskem with a wide range of feedstocks, including petrochemical naphtha, ethane, propane, hydrogen, and propylene. These materials will support Braskem’s operations at multiple industrial units located in São Paulo, Bahia, Rio Grande do Sul, and Rio de Janeiro. The contracts are structured to begin largely from 2026 onward and extend well into the next decade, providing long-term visibility for both companies.

The largest portion of the deal covers petrochemical naphtha supply, valued at over $11 billion. The agreement establishes minimum monthly volumes with pricing linked to international benchmarks, while also allowing flexibility for additional volumes. Projected supply levels are expected to gradually rise over the coming years, ensuring stable input for Braskem’s core production facilities.

Strengthening Competitiveness and Industrial Strategy

Beyond naphtha, the agreements include long-term supply of natural gas liquids such as ethane and propane, along with hydrogen, over an estimated 11-year period. These inputs are critical to Braskem’s strategy of increasing the use of gas-based feedstocks, which are generally more competitive and efficient than traditional alternatives.

From 2026 through 2028, Petrobras will supply established volumes equivalent to hundreds of thousands of tons of ethylene annually, with a planned increase from 2029 onward to support Braskem’s expansion plans. Key supply sources include major refining and processing complexes operated by Petrobras, ensuring logistical reliability and scale.

In addition, a separate propylene supply agreement, valued at close to $1 billion, will further diversify Braskem’s access to essential raw materials. Deliveries under this arrangement are expected to begin in mid-2026, reinforcing supply continuity across multiple production chains.

Industry observers see these agreements as a strategic move to enhance Brazil’s competitiveness in the global petrochemical market. By securing long-term, predictable feedstock supplies, Braskem can better manage costs and plan investments, while Petrobras strengthens its position as a cornerstone supplier to the domestic chemical industry.

Corporate Context and Market Implications

The timing of the deal is significant, as it coincides with broader changes in Braskem’s ownership structure and ongoing discussions around corporate restructuring. With major shareholders reassessing their positions, the long-term supply agreements provide operational stability and reassurance to investors, employees, and customers alike.

For Petrobras, the contracts reinforce its role beyond crude oil production, highlighting its importance in downstream and value-added industries. The agreements also align with Brazil’s broader industrial policy goals by supporting local manufacturing, employment, and export potential.

Overall, the $17.8 billion deal is expected to deliver long-term benefits to both companies and the wider Brazilian economy. By locking in essential feedstock supplies through the mid-2030s, Petrobras and Braskem have laid the groundwork for sustained industrial growth, reduced market uncertainty, and a more resilient petrochemical sector in an increasingly competitive global environment.