Ecuador enjoys an oil ‘bonanza’ as Iran war reignites

The war between the U.S. and Iran is good news for Ecuador. “The extra revenue the country is earning from high oil prices is a bonanza for the government,” according to energy analyst Jordan Andrade.

Ecuador oil production has declined for three consecutive years due to the poor condition of transport and refining infrastructure.

“No one is saying publicly that they are for the war, of course, but you won’t hear complaints from the treasury if it continues indefinitely,” says Andrade. “The new attacks in the Red Sea will only drive prices higher.”

The Finance Ministry reported Thursday that as of July 23, the government had collected more oil taxes than it did for all of 2025. It reported revenue of $1.63 billion compared to $1.59 billion last year.

As of Friday, the market price for oil was $92 per barrel and experts say it could go much higher based on attacks on shipping in the Strait of Hormuz and the Red Sea. “At this point there are too many variables to make future price predictions,” Andrade says. “What we know for sure is that the U.S. has been unsuccessful in bringing the war to a close and prospects are not good for that to happen soon. Oil prices will remain high.”

In the current budget, the Finance Ministry estimated an average market price of oil of $53 a barrel for 2026. Through mid-July, the average has been $77.

Andrade said that Ecuador’s oil windfall would be much greater if the country’s oil transport and refining infrastructure were in better condition. “For years, the government has neglected the system and, as a result, there have been frequent pipeline failures and the refinery in Esmeraldas continues to operate at 50% capacity,” he says. “The current government pledged a major investment, but this has not materialized.”