Colombia's New Government Plans Fossil Fuel Revival as Output Sits at Multi-Decade Lows
De la Espriella's August inauguration raises a medium-term bearish supply variable for distillate markets, but a decade of output decline means any recovery is years away.
Colombia's renewable energy capacity expanded eighteenfold between 2022 and 2026, reaching 3,600 MW from just 200 MW — the infrastructure legacy that conservative president-elect Abelardo de la Espriella inherits when he takes office on August 7, even as he prepares to dismantle his predecessor's anti-fossil-fuel agenda.5
De la Espriella, who was endorsed by Donald Trump and won the June 21 election by roughly one percentage point over Iván Cepeda, has signalled an abrupt reversal of outgoing President Gustavo Petro's moratoriums on upstream licensing. The policy shift adds a medium-term supply variable to distillate markets. NYMEX ULSD heating oil front-month stood at $4.08 per gallon as of Friday July 18's close.5
The production base he inherits is deeply depleted. Government data show Colombia was lifting 740,497 barrels per day in March 2026, well below the 917,210 barrels produced daily for the same period a decade earlier. Oil remained Colombia's single largest export, earning $12.5 billion in 2025, and the fiscal pressure to restore those flows is real. The engineering and regulatory lead times to do so are not short.2
Gas tells the same story. ANH data show Colombia's March 2026 output at 700 million cubic feet per day, the lowest in decades despite a near-1% uptick month-over-month. Four years of licence moratoriums, investment deterrence and pipeline under-investment cannot be reversed by a change of government within a single quarter.2
Where the Colombian supply shift is already visible is in coal exports. Provisional Kpler vessel-tracking data showed Colombian thermal coal deliveries to Europe were set to rise 48% from March's level to 1.12 million tonnes in April 2026, accounting for the largest share of total EU imports projected at 2.27 million tonnes — a five-month high and 10% above year-ago levels. Montel reported that utilities were restocking in anticipation of further gas price spikes linked to Middle East developments.1
That coal recovery has implications for the distillate complex. Reliable Colombian coal supply into European power markets reduces the incentive for utilities to switch to oil products in price-spike scenarios, dampening one source of demand-side support for heating oil. The broader consensus among distillate market signals sits firmly bearish, with three directional indicators pointing lower. A contrarian bullish read on European thermal coal, based on supply dynamics, provides the only visible offset, and at low confidence.1
The renewable buildout de la Espriella inherits complicates his fossil fuel narrative. The capital behind that 3,600 MW of capacity does not reverse simply because the political direction changes. He will be trying to attract upstream exploration investment into a country whose energy mix has structurally shifted, and where the fiscal terms for new oil and gas projects are yet to be defined.5
On the demand side, the UK Competition and Markets Authority has recommended stronger protections for the approximately 1.5 million rural households reliant on oil boilers, following an investigation into pricing practices in that retail market. The CMA finding reflects a fragmented, price-sensitive demand base exposed to any wholesale supply tightening — a constituency that cannot absorb higher heating oil costs without political pressure building on government.3
Latin American oil exporters more broadly have benefited from elevated crude prices driven by Strait of Hormuz disruptions, with Argentina's fiscal position stabilising as a result, Foreign Policy's Latin America Brief reported on Thursday July 17. Colombia has shared in that windfall less than its peers, given how sharply its output has contracted.4
The practical test arrives in the months immediately after the August 7 inauguration: whether de la Espriella can publish attractive upstream licensing terms before crude prices ease. If Bogotá moves slowly, or faces legislative resistance in a closely divided congress, Colombia's production recovery could remain a statement of intent rather than delivered barrels — and its coal export rebound the only near-term supply signal traders can actually position around.5,2