Oil surpasses soy as Brazil's top export amid electoral uncertainty.

Oil has structurally reshaped the map of Brazilian exports — and the moment could hardly be more charged with tensions.

The trade surplus in oil and derivatives reached US$31.22 billion between January and September this year, up 40% from the same period in 2025 and a historical record for the interval, according to Valor Econômico. The figure amounts to half of the country's total trade surplus and slightly exceeds the combined positive balance of all other items on the export agenda. Since September, crude oil has overtaken soybeans as Brazil's leading export — a shift in leadership that analysts attribute both to higher volumes and to the maintenance of relatively elevated prices, largely sustained by the conflict in Iran. Petrobras, whose common and preferred shares traded on B3 have gained roughly 100% in 2026 and whose ADRs trade on the NYSE, produced 2.96 million barrels of oil equivalent per day according to ANP data, with Bradesco BBI analysts maintaining an outperform view and a R$62 price target on PETR4. Even so, the shares fell about 3% on Monday, weighing on an Ibovespa that closed down 0.17%, at 205,079 points.

The pullback reflects something larger than a one-off adjustment: the Brazilian market is going through a week that concentrates, unusually, the simultaneous weight of electoral uncertainty, an earnings season that promises to disappoint, and a macroeconomic backdrop that is deteriorating at the margins. The dollar eased 0.51% to R$5.046 — a move at odds with the 0.15% rise in the DXY index on the same session, signaling that the local currency is responding, for now, more to the domestic electoral scenario than to global sentiment. The BTG/Nexus poll released on Monday showed a statistical tie between Flávio Bolsonaro (PL) and Lula (PT) in the runoff, with 50.3% and 49.7% of valid votes, respectively — a margin within the sampling error that keeps the outcome open and markets in wait-and-see mode.

The divergence between the two candidates on economic policy is substantive. In interviews with TV Globo, Lula defended growth as a fiscal adjustment mechanism, while Flávio Bolsonaro promised spending cuts and the sale of federal assets. Analysts, however, temper the enthusiasm of part of the market around a potential victory for the PL candidate. Felipe Salto, chief economist at Warren Investimentos, warned that a Flávio win would not automatically guarantee the organization of public accounts — any adjustment would require an immediate plan with only gradual effects. Under the current scenario, the Lula administration's electorally focused package of measures already totals R$290 billion in amounts projected for 2026 and 2027, generating pressure on public debt. The front-loading of the Bolsa Família payment calendar — whose 15.04% adjustment was announced 17 days before the first round, with documents prepared under secrecy by the Planning Ministry — added fuel to the fiscal debate. For a potential Flávio Bolsonaro government, analysts expect a leaner BNDES, with more restrained activity in financing the economy.

It is against this backdrop that third-quarter earnings season for Brazilian companies kicks off this Tuesday. Expectations are modest. Analysts surveyed by Folha de S.Paulo project results pressured by high interest rates and slowing activity — and the banking sector concentrates a significant share of concerns. The large banks are expected to report earnings compressed by the rising cost of credit, still-elevated delinquency, and household income strain that is beginning to spill into sectors previously viewed as more resilient. The Minha Casa, Minha Vida program, which in the second quarter accounted for 58% of launches and 51% of new home sales, according to CBIC, now faces rising delinquency among beneficiaries — a risk that is beginning to surface on homebuilders' balance sheets. This same credit stress is already producing effects in capital markets: investors have tightened conditions for private credit issuance, demanding new automatic acceleration clauses, according to a Valor Econômico survey.

Labor costs add another layer of pressure. A study by researcher Vitor Vidal, of the University of Barcelona, based on microdata from Pnad Contínua and the National Accounts, shows that unit labor costs stood, at the end of the second quarter, 3.1% above pre-pandemic levels — the highest level since the first quarter of 2016. In a decelerating economy, higher wages without proportional productivity gains raise operating costs for companies and, according to Vidal, point to accelerating unemployment through 2027. Economists polled by the market have already raised inflation projections for next year and lowered GDP estimates for 2026, 2027, and 2028 — a combination that leaves no room for error in the conduct of monetary policy.

At the sector level, the ETF market is growing at an impressive pace: the assets of these funds jumped from R$50.3 billion in January 2025 to R$136.7 billion in August 2026, a 172% increase, according to Anbima, driven above all by fixed-income products — a direct reflection of the high Selic that erodes corporate margins while generously rewarding investors in floating-rate paper. Two notable deals crossed the corporate wires: Google and McKinsey signed a commitment to purchase 320,000 metric tons of carbon removal credits over ten years in a silvopastoral project in the Amazon, signaling the maturation of Brazil's voluntary carbon market with demand anchors of global scale. And Aggreko, the Scottish temporary power generation company, acquired six thermal plants from Brasil Bio Fuels in Amazonas, a move that reinforces international groups' appetite for energy infrastructure assets in the North region, particularly at a time when severe drought has put Amazon and Pantanal waterways on alert for cargo transport. Vale, in turn, faces regulatory scrutiny on the Carajás Railway, where the ANTT is seeking explanations about R$1.16 billion in investments claimed by the miner — while on the strategic front the company is accelerating its bet on copper, with a production target of 700,000 tons annually by 2035 through its Vale Base Metals subsidiary, as signaled by CEO Gustavo Pimenta at the FT Metals & Mining Summit in London.

In the days ahead, the presidential runoff on October 26 will dominate attention. The Ibovespa, in the assessment of BB Investimentos analysts, should oscillate between 204,000 and 207,000 points while the result remains open — supports and resistances that could break quickly as electoral polls signal a clearer direction. Earnings season will gain speed through the week, and any surprise — positive or negative — in results from major banks or consumer companies could amplify market moves. The tax reform, whose implementation begins next year, adds an additional vector of uncertainty: the aviation association warns that the new rules may push up ticket prices and curb passenger growth, exposing the fragility of sectors that depend on price-sensitive demand in an environment of compressed income.

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