Andean Energy Crisis Hits Peru and Ecuador in May 2026

Peru and Ecuador are simultaneously confronting an Andean energy crisis driven by the Iran-Hormuz oil shock, structural refinery weakness, and import-dependence vulnerabilities. Peru’s transition government under President José María Balcázar issued Decreto de Urgencia 003-2026 on Monday May 11 authorising a US$2 billion contingent-finance package for state oil company Petroperú, plus US$500 million in short-term commitments, while Ecuador faced widespread gasoline shortages in Quito, Guayaquil and Cuenca as Petroecuador’s Refinería de Esmeraldas operated at 33-39% capacity after a third fire in 12 months. WTI crude rose 11% in early 2026 and a further 30% in March, exposing import-dependent Andean economies to global supply stress that has now spread from Russia-Iran tensions into Latin American filling stations.

The Rio Times, the Latin American financial news outlet, reports that the Andean energy crisis represents one of the clearest transmission channels from the Hormuz shock into Latin American consumer markets. Both countries depend heavily on imported fuels: Peru gets 74% of its energy from hydrocarbons, and Ecuador now imports approximately 90% of fuels consumed.

Council of Ministers president Luis Arroyo framed the Peruvian rescue as a financing innovation: “For the first time the financing will not come from the public treasury, not one sol of Peruvian taxes will be touched.” The decree authorises Petroperú to constitute a special-purpose vehicle to receive international private-banking finance under ProInversión oversight, with the Ministry of Energy and Mines (Minem) providing the contingent guarantee.

The Petroperú Rescue and the Refinery Risk

Petroperú president Roger Arévalo had warned the Peruvian Congress on April 28 that the country could face fuel-supply problems within days if no emergency measures were adopted. The Iquitos refinery was already shut due to lack of crude, the Talara facility was at imminent shutdown risk, and Conchán was also under pressure. Suppliers had moved to cash-on-delivery terms, compressing Petroperú liquidity at the worst moment.

Petroperú maintains 42% of national diesel market share and 31% of gasoline, rising above 75% in regions including Loreto, Ucayali and Madre de Dios where private competitors barely operate. The April 2 “safe stop” at a major facility was implemented to prevent worse damage, and the company has reported operational losses since 2022 alongside the start-up of the New Talara Refinery, a project whose financial returns have not materialised as planned.

The decree complements Decreto de Urgencia 010-2025 from December 2025 covering Petroperú restructuring. Council president Arroyo confirmed the company will remain state-owned but with revised management. The special-purpose vehicle can include Petroperú as sole shareholder, with ProInversión directing the use of resources and reporting annually to Minem.

The Ecuadorian Refinery Failure and Import Dependence

The Refinería de Esmeraldas, which represents 63% of Ecuador’s national refining capacity with installed capacity of 110,000 barrels per day, accumulated three fires in less than a year. The most recent on March 1 affected the Sevia unit and cut operation to 33% of capacity. Some analysts including Carlos Salazar of the Asociación de Distribuidores de Combustibles del Azuay estimate the effective operating rate is closer to 10%.

El Beaterio terminal in Quito saw daily quotas fall from 150,000 gallons to 100,000-120,000 (a 40% cut), generating losses of US$5 million per day against normal US$19 million revenue. The Ivo Rosero-led Cámara Nacional de Distribuidores de Derivados del Petróleo (Camddepe) confirms Petroecuador is dispatching 40% less product, while Cuenca terminals operated at 50% of normal volume on May 11 and the Petroecuador price-band adjustment scheduled for May 12 added speculative demand on top of the supply contraction, with current prices at US$3.024 per gallon for Extra and Ecopaís and US$2.962 for diesel.

The Hormuz Channel and the Trump-China Question

Both crises trace back to the Iran-Hormuz war. Peru’s decree explicitly cites “the conflict in the Middle East and the closure of the Strait of Hormuz have reduced global oil supply, increasing prices and putting at risk the energy security of importing countries.” Ecuador analysts including Oswaldo Erazo identify the same channel, with international fuel-supply and price problems compounding the structural refinery deficit.

Camddepe’s Carlos Salazar notes that any agreement during the Trump visit to China that normalises Hormuz traffic could improve Ecuadorian conditions by late May or mid-June. Petroecuador targets June 3 to restore Esmeraldas to 80% capacity, the trajectory that determines whether Ecuador’s fuel-line situation stabilises or persists into Q3 2026.

Connected Coverage

The Andean energy crisis fits inside the broader Hormuz-shock narrative covered in our Brazil-Russia diesel pivot piece and Iran-Hormuz Crisis 2026 guide. The regional production context is mapped in our LatAm oil supply leader analysis and the Petrobras response in our Petrobras Q1 coverage.

What to Watch

• Petroperú special-purpose-vehicle constitution: the 5-business-day ProInversión deadline for completing the corporate acts to access the US$2 billion finance window.
• Esmeraldas refinery restart: Petroecuador’s June 3 target for 80% capacity restoration, the principal variable for Ecuadorian normalisation.
• May 12 Ecuadorian fuel price-band adjustment: the monthly price update against the speculative-demand spike of May 11.
• Trump-China Hormuz negotiations: any agreement that normalises strait traffic and reduces Brent pressure on Andean import bills.
• Peru Talara refinery operational status: whether emergency funding restores production at the strategic facility shut on April 2.

Frequently Asked Questions

What did Peru approve on May 11?

Peru’s transition government issued Decreto de Urgencia 003-2026 authorising up to US$2 billion in contingent commitments by Minem to back Petroperú financing from international private banks, plus US$500 million in short-term commitments. The decree runs through December 31, 2026 and creates a special-purpose vehicle managed by ProInversión.

Why does Ecuador have a gasoline shortage?

The Refinería de Esmeraldas, 63% of Ecuador’s refining capacity, operates at 33-39% after a March 1 fire (the third in 12 months) and Ecuador now imports approximately 90% of fuel consumed. Quito, Guayaquil and Cuenca saw lines and shortages on May 11, with Petroecuador targeting June 3 to restore Esmeraldas to 80% capacity.

How does the Hormuz war affect Peru and Ecuador?

WTI crude rose 11% in early 2026 and an additional 30% in March on Iran-Hormuz tensions. Peru depends on hydrocarbons for 74% of energy and Ecuador imports 90% of fuel. Higher import prices and reduced global supply have compressed Petroperú liquidity and exposed Ecuador’s refinery weakness.

When will the crisis ease?

Petroecuador targets June 3 for 80% Esmeraldas capacity. The Peruvian US$2 billion finance window should provide liquidity within 5 business days of ProInversión approval. A Trump-China Hormuz normalisation could ease the crisis by late May or mid-June 2026, but persistent disruption would extend stress into Q3.

Updated: 2026-05-12T14:30:00Z