Oil price hits $100 a barrel following Russian invasion but exporters worry about market access

Feb 24, 2022 | 16 comments

Russia’s invasion of Ukraine is creating what Ecuador Foreign Minister Juan Carlos Holguín, Foreign Minister calls a “number of complicated scenarios.” The country will profit from soaring oil prices that moved above $100 a barrel Thursday, he said, but exporters could face huge losses if Russian markets collapse.

President Guillermo Lasso, right, with Foreign Minister Juan Carlos Holguín at a Thursday morning press conference at the Presidential Palace.

More important, says Holguín, is the safety of the estimated 1,500 Ecuadorians living in Ukraine. “Our immediate concern is for the wellbeing our fellow citizens,” he said. “Of those we are in contact with, most say they will stay in Ukraine for now but others fear for their safety and want to leave.” In a morning press conference, Holguín said that Slovenia and Poland have agreed to accept Ecuadorians who leave Ukraine without a Schengen visa.”

Also on Thursday morning, President Guillermo Lasso said that Ecuador would support the position of the United Nations and the Organization of American States in condemning the invasion. “The aggression is a violent intrusion and a violation of our pricinples for worldwide peace,” he said. He added, however, that Ecuador has no plans to suspend diplomatic relations with Russia.

Ecuador’s position reflects that of most Latin American countries regarding the invasion. Only Venezuela, Cuba and Nicaragua have announced support for Russia.

Most Ecuadorians living in Ukraine, live near the capital Kiev, according to the Foreign Ministry. “Explosions have been reported at airports and military bases in the area but most of the city and suburbs have not yet been affected,” Holguín said. “We have no reports at this points of any deaths or injuries to our citizens.”

Social media networks remained open Thursday and Ecuadorians in Ukraine were providing frequent reports from the regions, most assuring families in Ecuador that they are safe. According to the Unites States State Department, internet service could be suspended at any time. According to the U.S., Russian hackers have disabled almost all online Ukrainian government, military and banking networks.

On Thursday afternoon, the Ecuador Federation of Exporters (Fedexpor) said it could be days or weeks before it knows the full impact of the invasion on exports. “Annual exports to Russian total $1.2 billion and disruption to the markets could have severe consequences for Ecuadorian industries, particularly banana and flower growers,” Fedexpor said in a statement.

A major concern, said a Fedexpor spokesman, was the system of international bank transfers used by exporters and buyers. “We understand that the U.S. and the European Union may cut Russia’s ties with the banking process that moves money between countries,” he said. “There are also concerns about the stability of the Russian ruble which has lost 15 percent of its value in two days.”

Holguín acknowledged that Ecuador would benefit from higher oil prices but cautioned that the government is not counting on a windfall. “These prices are likely to be temporary given the political circumstances that are driving them,” he said. “Because of the many uncertainties created by the invasion, we face a period of great uncertainty. It will take weeks or maybe months before the chaos subsides.”


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