Immigrants from the Middle East began arriving in Brazil in large numbers in the twentieth century, especially following World War I. These immigrants spread throughout Brazil but can be found mostly in the Southeast region, where many are merchants.

Brazil's economic relations with the Middle East were accelerated by the 1973 petroleum crisis. Brazil tried to maintain a moderate stance vis-ą-vis the Arab-Israeli conflict and supported all UN peace initiatives. In late 1973, Brazil established embassies in Iraq and Saudi Arabia and legations in Libya and Kuwait, and it signed cooperation agreements with Egypt, Israel, and Iraq.

However, in 1975, because of the deepening petroleum crisis and in search of petrodollar investments, Brazil tilted its foreign policy in favor of the Arab (Palestinian) cause in three crucial votes in the UN. Brazil's military government upgraded its representation in Iraq by appointing a succession of four-star generals as ambassadors to Baghdad. When the Iran-Iraq War broke out in 1979, nearly 35 percent of Brazil's oil imports were coming from Iraq. In 1981 it was reported that Brazil had sold low-grade uranium ore or yellow cake (see Glossary) to Iraq.

The Iraq-Kuwait conflict, which resulted in Operation Desert Storm in early 1991, placed Brazil in a very delicate position. United States congressional subcommittees accused Brazil of exporting technology and expertise to Iraq to develop a missile based on the Piranha missile (MAA-1). Retired Air Force Brigadier Hugo Oliveira Piva had taken a private group of Brazilian technicians to Baghdad to complete this project; under pressure, the Collor government ordered the group's return to Brazil.

At the time of Desert Storm, a Brazilian construction company, Mendes Jśnior, had several hundred workers and technicians, as well as several million dollars worth of equipment, in southern Iraq working on railroad and irrigation projects. Thus, Brazil, unlike Argentina, did not participate in the Allied operation. The Brazilian government had to dispatch its key negotiator, Ambassador Paulo de Tarso Flecha de Lima, from his post in London to negotiate the release of the Mendes Jśnior personnel from Iraq and the disposition of the equipment. Brazil had won a US$5 billion price and performance competition to supply its Osório tank to Saudi Arabia in 1990, but the Kuwait conflict changed the decision in favor of the United States Abrams tank.

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Source: U.S. Library of Congress