Colombia’s Ecopetrol Posts Worst Q1 Since Pandemic at US$742 Million

The Ecopetrol report is a Colombian fiscal stress test in microcosm: a state oil company hit by Petro-era tax measures and peso appreciation despite a global oil shock that should have lifted its results, with the same Brent rally above US$110 that is filling other Atlantic-basin producers’ Q2 books now positioning Ecopetrol’s June report as a potential pivot point in the Colombia macroeconomic narrative.

Why is this Ecopetrol’s worst Q1 since the pandemic?

The Q1 2020 pandemic-driven collapse left Ecopetrol with only COP$133 billion in profit, a near-total wipeout. Every Q1 since has improved on that benchmark, with Q1 2022 and Q1 2023 marking the company’s strongest first-quarter results in history under the post-COVID oil price recovery. Q1 2026 is the first time the trajectory has reversed: COP$2.88 trillion in profit, down from COP$3.1 trillion a year earlier and the lowest Q1 reading in five years outside the pandemic anomaly.

Acting president Juan Carlos Hurtado attributed the result to three pressures: peso appreciation against the dollar, higher tax burden, and operational disruptions linked to the Middle East war that intensified from late February onward. “We started 2026 with a challenging geopolitical environment,” Hurtado said. “The high volatility of oil prices during the final month of the quarter, as well as operational disruptions in the industry, had an impact on our quarterly performance,” per La República.

Why did the stock rally on bad earnings?

The market reaction is the genuinely surprising part of the report. Ecopetrol shares closed up COP$115 at COP$2,465 on May 12, posting both the most-traded and the most-valued performance on the Bogotá exchange, even though the headline earnings number declined. The investor read was forward-looking: Q1 figures captured only two weeks of the post-February 28 Middle East war oil-price spike, with the bulk of the Brent move from US$78 to above US$110 falling in April and early May.

Source: Ecopetrol Q1 2026 results May 12; El Espectador and Infobae Colombia analysis.

Corficolombiana labeled the results “neutral.” Ecopetrol’s own calculations show that every additional US$1 of Brent generates incremental revenue contribution, with the company’s modeling indicating Q1 would have been roughly COP$1.5 trillion stronger had Brent averaged at current levels. Acting CEO Hurtado emphasized refining margin strength, noting the Barrancabermeja refinery’s US$16.2 per barrel margin and Cartagena’s US$18.9 per barrel margin, with consolidated refining EBITDA of COP$1.9 trillion versus a year earlier, per El País Cali.

What is the tax-burden problem?

The Q1 report quantified the cost of the Petro administration’s extraordinary tax measures more precisely than any previous Ecopetrol disclosure. The 10% surcharge on corporate income tax, applied since 2023, plus the wealth tax decreed for 2026, together reduced Q1 profit by COP$600 billion. The annual estimated combined impact reaches COP$1.2 trillion. Inflation-driven cost effects contributed another COP$200 billion drag.

The mechanical result is that Ecopetrol’s effective tax rate rose by 5.7 percentage points to 37.1%, one of the highest among publicly traded Latin American oil companies. The wealth tax is particularly unusual; few jurisdictions apply such taxes to state-controlled corporates. Moody’s downgraded Ecopetrol’s international credit rating earlier this year, citing the combination of higher tax burden, lower production trajectory, and questions about strategic direction under the outgoing Ricardo Roa presidency.

What is happening with company governance?

The Q1 report arrives in the middle of leadership transition. Former president Ricardo Roa stepped down earlier this quarter facing legal proceedings related to alleged improper financing of the Petro 2022 presidential campaign; he was charged and pleaded not guilty. Juan Carlos Hurtado Parra is serving as acting president while a permanent successor is selected. The day before the earnings release, board member Juan Gonzalo Castaño resigned after only three months in the role, citing disagreements over the handling of Roa’s situation.

Strategic announcements during the quarter included Ecopetrol’s stated intention to acquire a stake in Brazilian peer Brava Energia, with a partial tender offer to follow the block acquisition; the start of regasification operations at the Cartagena Puerto Bahía terminal in partnership with Frontera Energy; and exploratory success at the Copoazú-1 well, which confirmed gas in an accumulation independent of the Sirius find. Investment commitments totaled COP$5.3 trillion in Q1, split 67% Colombia, 33% international, per El Universal Colombia.

What should investors and analysts watch next?

• Q2 2026 results in August: the first quarter to fully capture the post-February Brent rally above US$110. Ecopetrol’s own sensitivity analysis suggests Q2 net income could surge by COP$1.5-2 trillion if current pricing holds, potentially making Q2 the strongest quarter in company history.
• Permanent CEO appointment: Hurtado is acting president pending succession to Roa. The choice between an industry executive and a politically aligned candidate is the single most important signal of Petro’s intent for Ecopetrol’s strategic direction.
• Brava Energia transaction structure: the announced Brazilian acquisition is the largest international expansion Ecopetrol has attempted in years. Watch for the partial-tender pricing and the board approval process.
• USD/COP trajectory: the peso’s 13% appreciation over the past year was the single largest drag on the Q1 result. Banco de la República policy decisions and Banco de Bogotá’s call for Bank of America’s COP$3,500 year-end target are key reference points.
• Hormuz disruption duration: the IEA’s working assumption is gradual reopening in June. Each month of delay translates to roughly COP$500 billion in upside for Ecopetrol’s results.

Frequently Asked Questions

How big is Ecopetrol within Colombia?

Ecopetrol is Colombia’s largest company by revenue and one of the largest in Latin America, with a market capitalization of roughly COP$100 trillion (US$25 billion). The Colombian state owns 88.49% of the equity. Ecopetrol contributions account for roughly 12-15% of the Colombian central government’s tax and dividend revenue depending on the oil-price environment.

Why is the peso appreciating despite a weaker oil result?

Several factors are lifting the Colombian peso: high domestic interest rates with the policy rate at 13.48%, continued international portfolio inflows attracted to those rates, and broad weakness in the US dollar versus emerging-market currencies. The mechanical effect is that even when Brent rises, the dollar receipts convert into fewer pesos than they would have a year earlier, reducing Ecopetrol’s translated revenue.

What is the Petro administration’s energy policy?

The Petro administration has officially favored energy-transition investments and has restricted new oil-exploration contracts since 2022, while still relying on Ecopetrol revenue for the fiscal accounts. The mix has produced declining hydrocarbon production (-2.7% YoY in Q1) alongside higher tax extraction, creating long-run sustainability concerns that investors and credit-rating agencies have repeatedly flagged.

How does Ecopetrol compare to Petrobras?

Petrobras is significantly larger, producing roughly 2.7 million barrels per day to Ecopetrol’s 725,000. Both are state-controlled Latin American oil companies that pay substantial dividends and operate in challenging political environments, but Petrobras benefits from larger pre-salt reserves and a structurally lower-cost production base. The two are joined by Brava Energia, the Brazilian independent that Ecopetrol intends to partially acquire.

What does the Moody’s downgrade mean?

Moody’s lowered Ecopetrol’s international credit rating earlier in 2026, citing the higher tax burden, declining production, and political pressure on company strategy. The downgrade increases Ecopetrol’s borrowing costs for international financing and signals to global investors that the company’s fundamentals are deteriorating relative to peers. A second downgrade would push parts of the debt below investment-grade thresholds for some institutional buyers.

Connected Coverage

Related Rio Times coverage: IEA says world oil reserves draining at record pace · Petrobras signals gasoline hike as Brent hits US$103 · BlackRock’s Fink “quite bullish” on Venezuela.

Published: 2026-05-13T20:30:00-03:00 · Updated: 2026-05-13T20:30:00-03:00 · Dateline: BOGOTÁ