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Ecuador's crude oil exports reached a new record low in October.
Average volumes loaded on tankers since early October currently
stand below 300,000 b/d. However, the country is now recovering
after massive protests which have had a huge impact on the local
oil industry. Loadings over the next couple of weeks will increase
rapidly, as the country is now focusing on rescheduling exports
that were earlier suspended.
In an effort to get a loan of USD 2.4 billion from the
International Monetary Fund (IMF), Quito planned to implement
austerity measures to reduce its fiscal deficit, including the
removal of fuel subsidies which caused a massive spike in local
prices. Due to the protests that followed, primarily by farmers,
state oil companies were forced to shut down production at 20
fields since early October. Exports were suspended, with total
losses having reached 1.5 million barrels of oil production during
the first half of the month. Protesters occupied some fields until
13th October, when the country's government withdrew the subsidy
removal. Repairing damages to production infrastructure caused
during the protests will cost USD 48 million, according to
estimates by state-owned Petroamazonas.
Ecuador, a member of OPEC plans to leave the cartel next January
to boost its production of crude oil, to strengthen its revenues.
The country's production stands close to 550,000 b/d, with
shipments having been on average close to 430,000 b/d, according to
IHS Markit Commodities at Sea.
Ecuador's reserves have been estimated at 8.27 billion barrels. The
USA continues to absorb most Andean exports, with flows close to
200,000 b/d not affected during the month. Meanwhile, the market
shares of Central and South America and Asia dropped to historical
low levels.
Ecuadorian crude oil is primarily carried by Aframaxes, which
have a market share of around 40% since early 2019, while larger
tankers (VLCC and Suezmax) have loaded around 33% of the country's
exports. The rest has been loaded on Panamax and smaller
tankers.
Posted 22 October 2019 by Fotios Katsoulas, Liquid Bulk Principal Analyst, Maritime, Trade & Supply Chain, S&P Global Market Intelligence
