Ecuador Raises Tariffs to 900% on Colombian Crude Exports in Latest Dispute

The Ecuador government of Daniel Noboa has announced a 900% increase on crude oil exports from Colombia as part of a recent trade dispute between the two South American nations on Monday.

Last week, Ecuador initially raised the duty costs of several Colombian products to 30%. Some of the goods tariffed included medical supplies, electricity, cars, and crude oil, citing dissatisfaction with anti-smuggling measures from the Colombian government, as criminal drug organizations that specialize in illicit mining operations and drug trafficking take advantage of a porous Ecuador-Colombia border.

The two leaders of both governments, conservative populist Daniel Noboa and the left-wing Gustavo Petro of Colombia, are two South American figures who are diametrically opposed ideologically and have muddled their way through multiple spats during their respective tenures in office. But with an $800+ million trade deficit with their counterparts to the north, Ecuador stands to suffer from any reduction in Colombian exports, especially crude oil, on which Ecuador relies heavily.

Colombia responded by calling the move an act of “economic aggression”, imposing reciprocal tariffs and halting the supply of energy to Ecuador, refuting the claims by the government in Quito by instead arguing that Colombian authorities have contributed much to the fight against criminal drug trafficking along the border region.

On Monday, Ecuador announced the imposition of an additional 900% tariff on crude oil imports along the lucrative Transecuatoriano pipeline (SOTE), an almost 500 km-long stretch of pipeline connecting the Colombian Amazon region to Ecuador’s Pacific coast. The measure will increase the transport fee by the SOTE from $3 to 30$.

The move by Ecuador will raise costs for Colombian distributors, impacting the state-owned Colombian oil firm, Ecopetro.