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Ecuador warns protests could force halt to oil production

June 28, 2022
oil and gas

Quito – Ecuador’s energy ministry warned Sunday that oil production had reached a “critical” level and could be halted entirely within 48 hours if protests and roadblocks continue in the crisis-wracked South American country.

Nearly two weeks of Indigenous-led protests against rising fuel prices and living costs have crippled transportation in Ecuador, with roadblocks set up in 19 of the oil-rich country’s 24 provinces.

“Oil production is at a critical level,” the ministry said in a statement.

“If this situation continues, the country’s oil production will be suspended in less than 48 hours as vandalism, the seizure of oil wells and road closures have prevented the transport of equipment and diesel needed to keep operations going.”

“Today the figures show a decrease of more than 50 percent” in production which, before the protests, was at roughly 520,000 barrels per day, it said.

Ecuador’s economy is highly dependent on oil revenues, with 65 percent of output exported in the first four months of 2022.

An estimated 14,000 protesters are taking part in the nationwide demonstrations, most of them in Quito.

Shortages are already being reported in the capital, where prices have soared.

The violence between police and demonstrators has reportedly left five dead, while some 500 people have been injured, according to various sources.

On Sunday, public-private economic losses from the protests totaled $500 million, according to Production Minister Julio Jose Prado.

“Each additional day of downtime represents $40 to $50 million lost,” he said.

Overall losses since the protests began include 8.5 million liters of milk worth $13 million, as well as $90 million in agricultural goods and livestock.

The tourism industry has meanwhile seen cancellations rise to 80 percent, with losses amounting to at least $50 million.

Additionally, “in the flower farm sector, 12 days of shutdown resulted in $30 million in losses and damage to trucks and farms,” Prado said.

iraqinews