Analysts point out that a reduction in the pressure on domestic oil prices in the international market would be felt. Increasing production is a challenge.
The 25% tariff the United States plans to impose on countries purchasing oil and gas from Venezuela starting April 2 could represent a window of opportunity for an improvement in the price of Ecuadorian crude oil, according to experts in the hydrocarbon sector.
President Donald Trump announced the order on Monday, March 24, which will exert pressure and affect the South American country, but also China, its largest buyer. The United States also imports Venezuelan crude oil.
Trump's decision authorizes the State Department to impose 25% tariffs, in addition to existing or threatened tariffs, on all goods imported into the United States from any country that imports Venezuelan oil, either directly from Venezuela or indirectly through third parties, according to a Bloomberg report.
As the tariff goes into effect, Venezuela has increased its oil exports to China, reaching their highest level in nearly two years. By the end of this month, shipments are estimated to rise to 400,000 barrels per day, which would be the highest volume since June 2023, according to preliminary data compiled by Bloomberg.
If tariffs are applied, it's expected that some Venezuelan buyers will seek other options in the market, and Ecuador could take advantage of this, according to experts consulted by this newspaper.
In the short term, the advantage could be reflected in Petroecuador's sales on the spot market, resulting in a reduction in the penalty on the price of domestic oil compared to WTI crude. This means that Ecuadorian crude could appreciate in value on the open market, analysts agree.
According to Petroecuador, spot sales revenue "doubled" last year, rising from US$3.244 billion in 2023 to nearly US$6.558 billion in 2024. Some spot sales have already been made in 2025; the most recent was on February 7, yielding US$128 million from the sale of 1,440,000 barrels of Oriente crude.
In January 2025, domestic crude oil sold for an average price of US$67.30 per barrel, and by February the price had dropped to US$64.80 per barrel, according to Petroecuador reports.
The penalty on Ecuadorian crude oil is currently around US$6-8 per barrel, according to engineer Fernando Reyes. He clarifies that, while the imposition of tariffs by the U.S. could improve prices for Ecuador somewhat, a radical change cannot be expected because the quality of Ecuador's oil is inferior to that of other producers due to its density, as it is a semi-light crude.
He believes that Ecuadorian oil, which has a significant diesel content, could appreciate in value due to changes in oil quality worldwide, particularly in the United States, where oil extracted through fracking is losing its diesel content: "This means that it has less and less diesel content, and this could be affecting the delivery of diesel volumes by refineries in the United States in the coming years. This is still something that is being observed."
On the other hand, José Xavier Orellana, business consultant and former Vice Minister of Foreign Trade, explains that Ecuadorian crude oil doesn't have the same viscosity as Venezuelan crude oil, but could replace it in some applications.
For example, some U.S. refineries located in the Gulf of Mexico are equipped to receive Venezuelan crude oil and could now use Ecuadorian hydrocarbons while the tariff is in place.
“Ecuadorian oil could serve as a substitute, as it has done in the past. Where an immediate effect could be seen is in the interest of refineries in that region, which would likely reduce the penalty Ecuador receives in sales, especially those on the spot market,” observes Orellana, who even believes that, if conditions are favorable, the situation could be even more positive for Ecuador.
Find new buyers and increase production
Although the imposition of US tariffs on Venezuelan customers could help Ecuador gain new buyers and increase oil exports, analysts see limited hopes of increasing production because domestic production has weakened since mid-2024 due to the progressive closure of Block 43-ITT, cable thefts, power outages, blackouts, and other causes.
Added to this is the decline in oil fields, the lack of well recovery, and the recent rupture of the Trans-Ecuadorean Pipeline System (SOTE) in Esmeraldas on March 13, which affected shipments abroad.
As of March 27, 2025, national production reached 468,003 barrels per day: 372,911 barrels from Petroecuador and 95,091 from private companies, according to the Hydrocarbon Regulation and Control Agency (ARCH).
According to figures from the Central Bank of Ecuador (BCE), national production totaled 173.95 million barrels in 2024, representing a slight increase of 0.3% compared to the previous year and an average daily production of 475,280 barrels.
Petroecuador contributed 139.65 million barrels, with a daily production of 381,570 barrels; while private companies extracted 34.30 million barrels, with a daily average of 93,720 barrels.
Bladimir Cerón, former Exploration and Production Manager at Petroecuador, points out that boosting production is feasible because the country has "sufficient capacity, the reservoirs have the capacity to produce much more, the surface facilities exist, the pipelines—both the SOTE and the OCP—are operating at half capacity; it's time to get to work."
However, he acknowledges that achieving this goal "requires more management," investment, and good governance. This goes hand in hand with sound political decisions. Only then will it be possible to achieve improved production levels in the coming months, he adds.
For now, the April presidential elections are also contributing to the continued stagnation of production, because there's a need for certainty about the country's direction, Cerón analyzes.
In 2024, 126.31 million barrels were exported for a total of US$8,646.54 million, with an average price per barrel of US$68.45. Compared to 2023, exports increased in volume (9.8%), price (0.7%), and value (10.5%).
Main destinations for Ecuadorian crude oil
Panama stands out as the main destination for crude oil and derivatives exports, both from private companies and Petroecuador, as the Central American country functions as a strategic port for oil distribution and storage, from where shipments are redistributed to international markets, according to a report from the ECB.
The other most important buyers for Ecuador are the United States, Peru, Chile, and Japan.
In Venezuela's case, Ecuador's oil trade balance registered a surplus of US$9.6 million between January and December 2024.
As for China, oil exports in 2024 reached US$4.5 million compared to US$13.6 million in imports, resulting in a deficit of US$9.1 million.
By January 2025, the latest available data, total oil exports, including crude oil and derivatives, reached 13.1 million barrels worth US$877.4 million.
The Central Bank explains that this implies "a slight increase of 0.4% in the amount exported, driven by a 5.3% increase in export prices, despite a 4.7% contraction in trade volume."
For production and exports to increase, personnel and officials in key positions with experience in the oil sector are needed, who perform their duties with transparency. Because while the current situation surrounding tariffs on Venezuela may be an opportunity for Ecuador, regardless, the country needs to increase its production, adds engineer Edmundo Brown, former manager of Petroproducción.
