Ecuador’s oil production has plunged to multi-year lows after heavy rains and erosion caused the shutdown of the two largest crude pipelines, potentially costing the country as much as $300 million in lost revenue. On 2 July, Ecuador’s national oil company EP Petroecuador declared force majeure on the operations of the Sistema de Oleoducto Transecuatoriano (SOTE) and the Oleoducto de Crudos Pesados (OCP) pipelines, in an effort to safeguard critical infrastructure. The SOTE pipeline was shut down the same day due to heavy rainfall, while operations of the OCP pipeline were suspended following erosion along the Coca River, which posed a significant risk to the pipeline’s integrity. The ongoing heavy rains have intensified erosion in the Napo province, particularly along the Coca River, where both pipelines run in proximity for a stretch. This erosion, which first began in 2020, has since expanded and continues to cause widespread damage to key oil infrastructure and road networks.
The OCP pipeline has an operating capacity of 450,000 barrels per day (bpd), and the SOTE pipeline has a capacity of 360,000 bpd, with both capable of handling medium to heavy sour crude. Between January and May 2025, both pipelines collectively transported an average of 460,000 bpd. Of this total, the SOTE pipeline accounted for 57%, while the remaining 43% was transported through the OCP pipeline. Due to the significant outages mentioned earlier, the SOTE pipeline transported just 23,300 bpd on 13 July — equivalent to 10% of its average throughput during the first five months of this year. Similarly, the OCP pipeline pumped an average of 3,500 bpd on the same day, representing 2% of its January–May 2025 average throughput.
The suspension of pipeline operations in July has led to the shutdown of the country’s oil production from key license blocks. Ecuador’s major oil-producing blocks, including Block 61 (Auca), Block 60 (Sacha) and Block 43 (ITT), which together contributed 42% to Ecuador’s overall crude output last month, have experienced significant outages this month. According to official data, two of these blocks, 60 and 61, have not been producing since 8 July. The country’s largest producing field, Sacha on Block 60, reported zero production last week, compared to an average of 75,000 bpd in June this year.
Ecuador’s overall crude production in June stood at 464,000 bpd, out of which the output from EP Petroecuador-operated fields accounted for 80%, while the remaining production came from fields operated by private players. EP Petroecuador had 2500 actively producing wells during June; however, as of 13 July, only 523 wells were actively producing, a 79% decline. This disruption led to overall production from EP Petroecuador-operated fields falling nearly 10-fold, from 369,000 bpd to 38,500 bpd. This level marks the lowest output recorded in the company’s history.
Oil plays a critical role in Ecuador’s economy, contributing between 6% and 8% of gross domestic product (GDP) in recent years, and accounting for a significant portion of government revenues and export earnings. Last year, crude production generated approximately $13 billion. This year’s revenue was already projected to decline to $11 billion, a drop of 15%, largely due to no new wells being drilled on the ITT block, a maturing portfolio in the country, and weaker global oil prices. With this latest disruption, the country stands to lose an additional $300 million in revenue, further straining fiscal stability and highlighting the vulnerability of Ecuador’s economy to operational setbacks in its oil sector.
By Udayan Anand, Analyst, Upstream Research at Rystad Energy
More Top Reads From Oilprice.com