Colombia's New Government: Can It Reverse the Decline of the National Oil Industry?

In a dramatic presidential election in Colombia, right-wing candidate Abelardo de la Espriella has won after an official recount. His opponent, left-wing Senator Ivan Cepeda, has conceded defeat. This fiercely contested campaign has divided communities and sparked controversy across Colombia. While debates continue over policies and De la Espriella's ascension to power, it is clear that his presidency will be a boon for Colombia's economically crucial but struggling oil industry.

Historic Election and Political Context

Following one of the closest elections in modern Colombian history, President-elect De la Espriella won after a recount by less than one percent. Although left-wing opponent Ivan Cepeda conceded defeat after Colombia's National Electoral Council (CNE) recount, controversy still surrounds his victory. Many concerns remain that De la Espriella will excessively tighten law and order, leading to human rights violations and criminalization.

Economic Policies and Energy Vision

The centerpiece of President-elect De la Espriella's platform is a plan to revive Colombia's depleted economy and achieve 7% annual GDP growth. To pursue this goal, he has the support of Vice President José Manuel Restrepo Abondano, who previously served as Colombia's Minister of Finance and Public Credit from May 2021 to August 2022 under President Iván Duque. Alongside fiscal tightening measures to control Colombia's exploding budget deficit, projected at 7-8% of GDP, De la Espriella plans to revive the economically crucial oil industry.

Colombia's Economic Situation and Oil & Gas Sector

The main factor behind Colombia's recent economic downturn has been the collapse of its once-dominant hydrocarbon sector. In fact, over the past decade, natural oil and gas production has plummeted, raising concerns about an energy crisis, particularly with increasing costs for imported liquefied natural gas (LNG). By April 2026, oil production of 724,910 barrels per day was significantly lower than 915,087 barrels per day in the same period ten years prior. The reduced production and limited refining capacity force Colombia to import more diesel oil, primarily for agriculture and transportation.

The sharp decline in natural gas production severely threatens the economy and electricity grid. By April 2026, Colombia was extracting 694 million cubic feet of natural gas daily, nearly at its lowest level in decades. This is also significantly lower than the 1 billion cubic feet/day produced in the same period a month earlier. The growing supply-demand gap between domestic demand and production has forced Bogotá to begin importing LNG in December 2016.

Economic Impact and Energy Challenges

Increasing dependence on expensive imported natural gas is driving up inflation, reaching a year-on-year rate of 5.84% in May 2026, the highest since 2024. This has created a cost of living crisis, affecting low-income households where natural gas is the primary energy source. The rapid increase in imported LNG and petroleum products at high costs is also creating structural problems for Colombia's balance of payments, while weakening energy sovereignty at a sensitive time when Middle East conflicts limit global LNG supply.

The Andean nation has imported nearly one-third of the natural gas it consumes. The increase in natural gas imports has pushed prices up 25-36% in many regions of Colombia. This will severely threaten affordable electricity generation when severe El Niño droughts reduce water levels, thereby decreasing hydroelectric output, forcing gas-fired power plants to make up the shortfall. Higher natural gas and electricity prices will further strain Colombia's fragile, financially strained economy.

President-elect's Energy Policy

De la Espriella's policy aims to mitigate economic risks and other energy issues by boosting investment in Colombia's declining oil fields and increasing hydrocarbon production. The president-elect will protect Ecopetrol as an important government asset while promoting natural gas as a transition fuel for the clean energy transition. He also intends to reactivate exploration and production activities after Colombia's first left-wing President Gustavo Petro halted new drilling contracts upon taking office in August 2022.

Shale Oil Extraction (Fracking) Plan

De la Espriella plans to revive controversial shale oil extraction techniques, known as fracking, in Colombia. However, this will be limited to experimental operations under strict regulations. A crucial factor is the requirement that these projects only operate on geologically stable land without seismic risks, where there is no danger to water sources, the local environment, or indigenous rights. Operators must obtain social permits where local communities agree to allow fracking experiments to operate in their areas.

These strict conditions reflect those set by Colombia's Council of State, the highest administrative court, when allowing fracking experiments during the Duque presidency. In fact, in its 2022 ruling, the Council of State upheld the government's right to regulate fracking when it rejected a lawsuit aimed at overturning Bogotá's authority to permit fracking in Colombia. Colombia is believed to possess enormous shale oil and gas potential.

Economic and Energy Impact

Estimates vary, but Colombia's hydrocarbon regulatory agency, the National Hydrocarbon Agency (ANH), states that the country possesses 3 billion barrels of recoverable shale oil and 34 trillion cubic feet of shale gas. If confirmed, fracking would significantly increase Colombia's declining proven reserves, which again decreased in 2025. Higher oil and natural gas production would minimize the economic risks arising from insufficient domestic supply.

De la Espriella's security crackdown plan, including military attacks on illegal infrastructure, will improve the outlook for reviving Colombia's economically vital oil industry. The combination of tight economic policy and energy focus could reshape Colombia's energy and economic future in the coming years.

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