A spat over fuel prices last month saw Brazil’s President Jair Bolsonaro replace the CEO of national oil company Petrobras Roberto Castello Branco, who is popular among investors with former Defense Minister and army general Joaquim Silva e Luna. Brazil’s federal government was able to exercise such a monumental power because it is the majority owner of Petrobras. The Brazilian state directly owns 28.67% of Petrobras with another 8.08% held by the Latin American country’s national development bank, giving a total controlling interest of 36.75%. Bolsonaro’s decision roiled investors triggering a sharp sell-off of Petrobras stock which plunged by over 20% while the broader Brazilian bourse, as measured by IBOVESPA index which measures the performance of the top 70 stocks in Latin America’s largest economy, lost over 5%. This event reawakened investor fears of a return to resource nationalism, government interference in Brazil’s energy sector and heavy-handed intervention in […]