Tehran and Brasilia are exploring opportunities that would allow Iran to build an oil refinery in Brazil, as well as Brazil's participation in deep-sea oil extraction and manufacturing oil equipment.
Brazil's Minister of Mines and Energy Fernando Coelho Filho met last Thursday with Iran's ambassador Ali Saqqaeian to discuss the possibility of Iran constructing a refinery in Maranhao, located in northeastern Brazil. According to reports, China and India are also interested in building a refinery there.
Iran had shown interest in investing in the construction of the Premium I and Premium II refineries in Brazil’s northeastern states of Maranhao and Ceara, which are designed to produce low-sulfur fuels. Because of financial problems, a corruption scandal and falling oil prices, Brazil’s state-owned Petrobras suspended work on both projects, which are expected to cost more than $15 billion, according to Reuters.
Interests in the energy sector of one country by the other have not been a one-way proposition. Since 2009, Brazil has been interested in hydrocarbon reserves located in Iran’s share of the Caspian Sea. Then Petrobras invested $100 million to explore Iran's Tusan block in the Persian Gulf, but later it announced that wells drilled by Petrobras have failed to come up with commercially significant oil volumes.
While energy remains a priority area for cooperation, it is by no means the only avenue to expanding economic relations between the two countries.
Brazil is Iran’s main trading partner, with most business conducted in the mining and agriculture sectors. Brazil exported about $2.2 billion worth of commodities to Iran and imported $75 million in return, between March 2016 and March 2017, according to the head of Iran-Brazil Joint Chamber of Commerce, Kaveh Zargaran.
Brazil’s top exports to Iran include food, medication, minerals and automobiles. Agricultural products account for the major part of Brazil’s overseas sales to Iran, and it sells $400 million worth of meat to Iran per year.
Thanks to the lifting of nuclear-related sanctions beginning in January 2016 that had been placed on Iran by the international community, Iran will be able to open bank branches and begin banking activities in Brazil.
In 2016, Iran also reached an agreement with Brazilian airplane manufacturer Embraer to purchase 10 passenger jets. Just this month Iran’s ATA Air received its first second-hand 50-seat ERJ 145 light passenger jet from the company. Earlier this year Iran’s Kish Air received four 108-seater Embraer 195 aircraft. More Iranian airlines are expected to receive airplanes from the Embraer by March 2018.