Brazilian judge suspends 12% crude oil export tax for five international oil companies
Judge Humberto de Vasconcelos Sampaio ruled that the sudden imposition of the 12% rate amounts in practice to the creation of a new tax burden with a merely revenue-raising purpose
A federal judge in Rio de Janeiro issued a preliminary injunction suspending the 12% crude oil export tax for five international companies operating in Brazil: Shell, TotalEnergies, Equinor, Repsol Sinopec and Petrogal. The ruling represents an initial court victory for the oil companies in their dispute with President Luiz Inácio Lula da Silva’s government over a levy they consider unconstitutional.
Judge Humberto de Vasconcelos Sampaio, of Rio de Janeiro’s first federal court, ruled that the sudden imposition of the 12% rate amounts in practice to the creation of a new tax burden with a merely revenue-raising purpose, according to the financial daily Valor Econômico. The decision suspends the tax’s effects for the five companies since its entry into force on March 12 and shields them from penalties.
The Brazilian government created the levy by provisional decree in March as part of a package to cushion the impact of surging oil prices triggered by the U.S.-Israeli war against Iran, which began on February 28. The revenue was intended to offset the temporary elimination of the federal PIS and Cofins taxes on diesel and a direct subsidy program for fuel producers and importers, aimed at curbing pump prices.
The five plaintiff companies produced approximately 791,000 barrels per day of crude in February, equivalent to 20% of national output, according to data cited by Folha de São Paulo. Virtually all of that production is exported — a volume exceeding Petrobras’ average exports in 2025, which hit a record 765,000 barrels per day.
Government sources said they will appeal the ruling. The Lula administration maintains that this is not a new tax but rather a modification of an existing levy whose rate had been set at zero as an export incentive. Energy Minister Alexandre Silveira defended the measure at an industry event in Rio de Janeiro, asking why oil companies profiting from the war should not contribute more, according to Reuters.
The companies argue that the tax violates the principles of legal certainty and free competition, placing them at a disadvantage in the international market. At an event hosted by the Brazilian Petroleum Institute (IBP) on Wednesday, Equinor’s Verônica Coelho warned that unexpected fiscal changes raise country risk and complicate new investment decisions.
The case has a direct precedent: in 2023, the Lula government imposed a similar 9.2% levy on crude exports, which was subsequently ruled illegal by a federal appeals court. The current ruling is preliminary, and a final decision on the merits remains pending.
