Country profile: Ecuador

Ecuador is one of Latin America’s largest crude oil exporters, with net oil exports estimated at 350,000 barrels per day (bbl/d) in 2006. The oil sector dominates the Ecuadorian economy, accounting for almost half of total export earnings and one-third of all tax revenues. Despite its large oil exports, Ecuador must still import refined petroleum products due to the lack of sufficient domestic refining capacity to meet local demand. As a result, the country does not always enjoy the full benefits of high world oil prices: while these high prices bring Ecuador greater export revenues, they also increase the country’s refined product import bill.

In 2007, Ecuador re-joined the Organization of the Petroleum Exporting Countries (OPEC), after leaving the organization at the end of 1992. Ecuador is the smallest oil producer in OPEC, with an assigned production quota of 520,000 bbl/d. Since Ecuador is currently producing below its quota level, it is unclear what, if any, effect OPEC membership will have upon the country’s oil production levels. Ecuador’s energy mix is largely dependent upon oil, which represented 80 percent of the country’s total energy consumption in 2005. Hydroelectric power represented 17 percent of total energy consumption in 2005, and it is the largest source of electricity generation. Natural gas consumption is small, due to the lack of domestic infrastructure to transport and distribute the fuel.