April 14, 2026 [Reuters]- Brazilian state-run oil firm Petrobras ​is in initial direct negotiations with Abu Dhabi’s ‌Mubadala sovereign wealth fund to repurchase the Mataripe refinery in Brazil, two sources with knowledge of the matter told Reuters on ​Monday.

President Luiz Inacio Lula da Silva said last ​month that Petrobras would repurchase the refinery, which had ⁠been sold during the administration of his predecessor ​Jair Bolsonaro. After Lula’s remarks, Petrobras had said it would ​analyze a potential deal.

A deal could be inked by the end of this year, the sources said. Mataripe is Brazil’s second largest ​refinery, but is operating at only around 60% ​of capacity, while Petrobras’ plants are operating at their limit in ‌order ⁠to boost local production, one source said.

Petrobras’ plans to increase refining capacity have gained fresh urgency after the U.S.-Israel conflict with Iran caused global diesel prices to ​surge, impacting Brazilian ​consumers due ⁠to the country’s dependency on foreign diesel. Brazil imports about a quarter of its ​total diesel needs.

The rise in fuel prices ​has ⁠become a major concern for Lula ahead of a presidential election in October, where he will seek a fourth ⁠non-consecutive ​term.

Petrobras did not immediately comment. Mubadala ​declined to comment.