# [WARNING] Ecuador Fuel Shortages Worsen As Refinery Output Collapses

*Tuesday, May 12, 2026 at 3:49 PM UTC — Hamer Intelligence Services Desk*

**Detected**: 2026-05-12T15:49:31.296Z (3h ago)
**Tags**: MARKET, energy, refining, LatinAmerica, sovereign-risk
**Sources**: OSINT
**Permalink**: https://hamerintel.com/data/alerts/6556.md
**Source**: https://hamerintel.com/summaries

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**Summary**: Multiple reports from Quito confirm widening gasoline shortages alongside fresh warnings that the Esmeraldas refinery is near operational collapse, with diesel output cut to roughly one‑third of nameplate capacity. This materially tightens domestic products supply, raises default risk on imports and subsidies, and could add a modest bullish impulse to regional refined product cracks and Andean sovereign risk.

## Detail

1) What happened: In the last hour, Ecuadorian outlets and industry representatives report a notable deterioration in fuel availability. Primicias and Radio Pichincha document at least three gas stations in Quito already closed and others rationing sales or opening limited hours due to lack of gasoline. Parallel interviews with the head of the national distributors’ chamber state that Esmeraldas refinery, after a recent fire, is only producing about 10 kb/d of diesel versus a previous 33 kb/d, with critical vulnerabilities in its steam system leaving the plant "on the verge of collapse." Citizen reports indicate irregular retail practices (fuel sold in canisters), consistent with acute shortage conditions. These items update and corroborate an existing warning about Esmeraldas nearing collapse.

2) Supply/demand impact: Ecuador’s total refining capacity is ~175 kb/d, with Esmeraldas the backbone for domestic diesel and gasoline. A sustained 20–25 kb/d shortfall in diesel/gasoline versus prior output implies the state must quickly increase imports of middle distillates and mogas or accept rolling shortages. Given fiscal constraints and existing subsidy burdens, the government’s ability to finance emergency imports at $100+/bbl is limited, heightening the risk of longer queues, informal markets, and potential social unrest, particularly from transport and agriculture sectors whose fuel costs are rising after the recent price hikes.

3) Affected assets and direction: Direct global crude impact is limited (Ecuador is a modest producer), but regional refined products markets—especially US Gulf Coast and Caribbean suppliers—stand to see stronger demand and wider diesel/gasoline cracks. Names most exposed: Brent and WTI crack spreads, USGC ULSD and RBOB futures (bullish), and potentially Ecuador sovereign bonds and CDS (wider spreads) if shortages feed into protests or political instability. Local FX (USDized economy) won’t move, but elevated default/IMF risk can affect Andean curves and regional EM credit sentiment.

4) Historical precedent: Ecuador has a record of fuel shortages and subsidy protests (e.g., 2019), which quickly morphed into nationwide unrest and forced policy reversals, often widening risk premia on local assets and modestly lifting regional product prices.

5) Duration: This looks structural over weeks to months rather than a 24–48 hour disruption. Even if Esmeraldas avoids full shutdown, restoring diesel output from 10 kb/d back to 30+ kb/d requires significant repairs and capital the state struggles to mobilize. Until then, expect persistent domestic shortages, elevated import needs, and a sustained though modest bullish bias for regional refined products and Ecuador credit risk.

**AFFECTED ASSETS:** USGC ULSD futures, RBOB gasoline futures, Brent crack spreads, WTI crack spreads, Ecuador sovereign bonds, Andean EM credit indices