Brazil pumps oil from the ocean floor, far from any war zone.

The Strait of Hormuz carries 20 percent of the world’s oil. When that flow gets choked, every barrel produced outside the conflict zone gets repriced higher.

Brent crude has been trading north of $100 a barrel since the Iran war disrupted Gulf supply back in March, and it is not coming back down anytime soon.

Petrobras (PBR) drills the deepest, richest pre-salt fields off the coast of Brazil. The breakeven on those barrels sits around $28.

With Brent over $100, every dollar above that breakeven flows straight to free cash flow. The company generated $16.5 billion in free cash flow last year before crude even cracked $100. At current oil prices, that number could double.

The bigger picture is what makes this different from any other oil major.

The pre-salt portfolio off the Santos Basin produces over a million barrels a day at one of the lowest cost structures in global energy.

The new P-78 floating production unit just came online in the Búzios field, with the capacity to produce another 180,000 barrels a day.

While the rest of the world worries about supply disruption, Petrobras is bringing more supply online from a region nobody can blockade.

The stock is up 86% this year. That run started from $11 back in December and has not stopped grinding higher.

The chart is doing three things that I look for in a high-quality setup.

The trend is up on every timeframe that matters. Price is grinding above its short-, medium-, and long-term moving averages on both the daily and weekly charts.

That tells me the buyers are in control across multiple timeframes. When the trend lines up like that, you have permission to look for a long entry.

The pattern is a clean channel that has held since December. Every dip has been bought. That is the kind of orderly action that comes from real institutional money positioning, not retail chasing headlines.

And right now, a squeeze is forming on the daily chart. A squeeze is when volatility contracts so tightly that the price has nowhere left to go but out. Imagine a coiled spring.

The longer it stays compressed, the bigger the move when it releases. The squeeze on PBR is in its early stages, which means the spring is loading. Direction is not guaranteed, but a real move is coming.

RSI is firm without being overheated. And volume is steady and not yet exhausted.

That is the setup. Trend gives me permission. The pattern shows me where. And the squeeze tells me when.

The bear case is the same force that built the bull case.

If the Strait of Hormuz reopens and Gulf oil starts flowing again, crude could drop $10 to $20 a barrel quickly.

Every oil stock would feel it, including this one. There is also a political risk that comes with the territory. The Brazilian government controls Petrobras and has a history of forcing the company to cut dividends or freeze fuel prices when domestic inflation runs hot.

When that happens, shareholders get the short end of the stick.

Your Action Plan

Everyone is waiting for the conflict in Iran to resolve itself. However, every time I check the price of oil, it’s grinding higher.

In the short term, PBR has the potential to run even higher. But right now, with earnings season here, I feel like there are better opportunities. Those who are not so tied to geopolitics.

If you’d like to learn what they are, then click here to find out more.