Petrobras - Q1 2026 Earnings Analysis

Performance Highlights

Petrobras reported Q1 2026 sales revenues of US$23.5 billion, essentially flat with Q4 2025 and up 11.7% year-over-year, with adjusted EBITDA excluding one-off events of US$11.7 billion beating the prior-year quarter by 10.2% and net income excluding one-off events of US$4.5 billion rising 12.6% against Q1 2025. Total own production in Brazil reached a record 3.196 million boed, a 3.7% sequential increase, while the pre-salt layer alone set a new record at 2.66 million boed, demonstrating the continued output momentum from P-78 and FPSO Alexandre de Gusmão ramp-ups.

The single most important operational driver was the combination of record production and an 11-year-high refinery utilisation factor of 95%, with a March peak of 97.4%, enabling a 6.7% sequential increase in refined products output to 1.816 million bpd and reducing dependence on imports. Supporting these results, the E&P segment generated adjusted EBITDA of US$10.3 billion, up 8.9% sequentially on higher Brent averaging US$80.61 per barrel, while the RTM segment posted adjusted EBITDA of US$3.8 billion, more than doubling year-over-year as higher utilisation and favourable inventory effects boosted refining margins.

Management Outlook and Forward Catalysts

Management reaffirmed its 2026 oil production target of approximately 2.6 million bpd, plus or minus 4%, while noting a trend toward higher maintenance-related production impacts in the second half, and confirmed 2026 cash capex guidance of US$16.9 billion; the early start-up of P-79 in May 2026, three months ahead of schedule, signals strong execution discipline. The contracting of nine thermal power plants under LRCAP26 for approximately 2.6 GW and estimated fixed revenues of R$44 billion through 2031 marks a meaningful step toward diversified, regulated cash flow streams.

The central investor debate for Q2 2026 centres on whether the lagged pricing effect from rising oil prices will fully materialise in export revenues, given that an 81 Mbpd export carryover balance from Q1 is set to settle in Q2, and on whether gross debt, currently at US$71.2 billion against a US$65 billion Business Plan target, will trend lower as free cash flow is deployed. Bulls will focus on P-79 production ramp-up and potential Equatorial Margin licensing progress as near-term catalysts, while bears will monitor lifting cost inflation, now at US$6.76 per boe, and the pace of debt convergence given elevated lease obligations of US$43.7 billion.