Ecuador is an oil producer that is starting to feel like an oil client. The country now spends almost as many dollars importing gasoline, diesel and cooking gas as it earns from selling crude.
For a dollarized economy that cannot print its own currency, losing that extra oil income is like losing a safety net just when security and social pressures are rising.
For years, the “oil cushion” paid the difference between cheap fuel at home and the real cost abroad, and still left money for the budget. In 2022, high prices gave Ecuador a record surplus of about $5.7 billion between oil export income and fuel import costs.
By 2025, that cushion is projected to shrink to roughly $662 million. In 2026 it might recover only to around $945 million – a thin margin.
The math behind this is simple and worrying. The government expects to earn about $5.9 billion from crude exports in 2026, but could spend close to $5.0 billion buying refined fuels.
When An Oil Country Becomes A Fuel Buyer: Ecuador’s New Reality. (Photo Internet reproduction)
Ecuador sells heavy crude at roughly $53 a barrel and buys back gasoline and diesel near $74 a barrel. The old model – extract, export, subsidise and still have cash left – is breaking.
Ecuador’s Oil Decline Is a Crisis Made by Politics
There is a story of choices and neglect behind the numbers. Oil production stagnated near 470,000 barrels a day and then began to fall. A referendum ordered the shutdown of the Yasuní-ITT block, taking out a field that once supplied more than a tenth of national output.
Key pipelines were not protected in time from river erosion and landslides; when they failed, hundreds of wells were shut. Investment at state company Petroecuador collapsed, refineries broke down, and the country had to import more fuel at the worst possible moment.
Non-oil exports like shrimp, cocoa and mining are now bringing in more dollars than crude. That shows the energy of the private sector.
But as fuel subsidies are cut and protests organised by entrenched groups grow louder, Ecuador offers a clear lesson: when politics punishes investment and rewards easy promises, the bill always arrives – and it is paid by ordinary taxpayers and savers.
