Ecuador's Oil Production Targets Face Lower Projections from Central Bank Amidst Shifting Price Outlook

Ecuador's Ministry of Energy has set a target to increase oil production to 500,000 barrels per day by December 2026. This objective contrasts with the projection for 2027 from the Central Bank of Ecuador (BCE) and the Ministry of Economic and Productive Development, which anticipates a considerably lower production level. Between January and August 2026, national oil production averaged 461,000 barrels per day.

According to the Macroeconomic Program 2026-2030, published by the BCE and the Ministry of Economic Development on September 15, production is projected to grow by only 0.4% next year, reaching an average of 463,013 barrels per day. To attempt to raise production, the government plans new rounds to optimize marginal fields, the awarding of contracts from Ronda Intracampos III, and increased extraction in fields already in operation, such as Sacha. The government also seeks to promote new explorations in the Gulf of Guayaquil.

The BCE projects the average price of an Ecuadorian crude barrel to close at USD 75.3 in 2026, which is above the USD 53.47 initially projected by the Ministry of Economic and Productive Development. For 2027, the BCE projects an average price of USD 66 per barrel, lower than the 2026 forecast and current year prices. This projection is set against a backdrop marked by the conflict between the United States and Iran, which began on February 28. The WTI, a reference for Ecuador, closed at USD 100.30 per barrel on September 18, with crude prices having risen 5% since the previous week following a drone attack on an oil pipeline in Saudi Arabia.

To calculate the price of Ecuadorian crude, the BCE starts from a projected annual average of WTI and applies a differential or quality penalty of approximately USD 7.50 per barrel, as Ecuadorian crude is heavier and has a higher sulfur content. The BCE assumes that the current price increase will be temporary and that the oil market will correct itself, with prices potentially dropping further to USD 62.5 per barrel in 2028. The oil price projection will be a key input for the 2027 General State Budget Proforma, due by October 31.

Between January and August 2026, Ecuador received USD 1,434 million in oil revenues, an increase of USD 633 million (79%) compared to the same period in 2025, primarily driven by the rise in the international price of crude oil.

What to watch

Monitor the government's progress on new oil rounds and exploration efforts, particularly in the Gulf of Guayaquil, as these are intended to bridge the gap between the Ministry of Energy's production targets and the BCE's more conservative projections. Observe global geopolitical developments, especially the US-Iran conflict and any further attacks on oil infrastructure, as these factors could influence the duration of current high oil prices and potentially challenge the BCE's assumption of a temporary price increase and market correction. The 2027 General State Budget Proforma, due by October 31, will reflect the government's official oil price and production assumptions for the coming year.

Sources: primicias.ec.