Colombia faces a sharp decline in its petroleum sector, which provides roughly 28% of the country’s export earnings and historically underpinned government finances. The nation’s proven oil reserves fell nearly 1% year-on-year to 2.02 billion barrels at the end of 2025, while natural gas reserves plummeted 17% to 1.717 trillion cubic feet, leaving only about six years of supply at current production rates. The energy situation has become increasingly precarious as domestic output continues to contract.
President Gustavo Petro, who took office on August 7, 2022, implemented sweeping energy reforms aimed at reducing Colombia’s dependence on hydrocarbons, including hiking taxes on extractive industries and freezing new drilling contracts. These policies prompted major operators, including ExxonMobil, to suspend or exit operations in the country. The revenue decline has strained government finances at a particularly difficult moment, with escalating violence driving security spending sharply higher and threatening to push the 2026 budget deficit to a record 8.1% of GDP.
New President Abelardo de la Espriella, a former criminal defense attorney, has reversed course and placed hydraulic fracturing, commonly known as fracking, at the center of his energy agenda as a means to restore production and fiscal stability. Colombia has a contentious history with fracking, with the Council of State imposing a moratorium in 2018, though pilot operations were later permitted. Petro’s prior efforts to formally prohibit fracking, including a last-ditch attempt in July 2026, failed in Congress.
The country’s vulnerability to energy shortages is acute, with Colombia increasingly reliant on costly liquefied natural gas imports, which currently supply roughly a quarter of domestic consumption. LNG prices have surged significantly due to regional geopolitical tensions, with Middle East conflicts disrupting global supply. October and November 2026 LNG contracts to Colombia are priced 79% higher than in February 2026. Rising energy costs are straining an already fragile economy, particularly affecting the industrial sector, which depends heavily on natural gas for manufacturing operations.
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