Colombia's Natural Gas Crisis Deepens as Strait of Hormuz Closure Cuts Supply

Why It Matters

The crisis threatens Colombia’s economic stability by inflating energy costs, eroding industrial competitiveness, and jeopardizing grid reliability, all amid fiscal pressures from President Petro’s anti‑fossil policies.

Key Takeaways

• Colombia's natural‑gas output fell 15% YoY to 700 MMcf in March 2026.
• LNG imports rise to 33% of supply in 2026 amid Hormuz closure.
• Imported gas price jumped 26% to $18.39 per MBTU, boosting inflation.
• Petro's anti‑fossil policies halted new exploration, shrinking reserves to 2 Tcf.
• Power‑plant shift and El Niño drought strain grid, risking blackouts.

Pulse Analysis

The abrupt closure of the Strait of Hormuz has sent shockwaves through the global liquefied natural gas (LNG) market, curtailing roughly 20% of worldwide shipments. With Qatar’s output disrupted and shipping routes constrained, LNG spot prices have surged, making imports markedly more expensive for import‑dependent nations. Colombia, which has already been transitioning from self‑sufficiency to a reliance on imported gas, now faces a price environment where each MBTU costs $18.39—up 26% from a year earlier—pressuring both industry and households.

Domestically, Colombia’s hydrocarbon sector is in a steep decline. Natural‑gas production slipped 0.7% month‑over‑month and remains 15% below the previous year’s level, while proved reserves have fallen to 2 trillion cubic feet, enough for less than six years of output. President Gustavo Petro’s policies—tax hikes on fossil fuels and a ban on new exploration contracts—have halted the pipeline of new reserves, forcing operators to divert associated gas for enhanced oil recovery rather than commercial sale. This structural squeeze limits the country’s ability to offset the global supply shock with home‑grown gas.

The convergence of higher import costs, dwindling domestic output, and a power‑generation shift toward gas‑fired plants amid El Niño‑driven hydro shortages creates a perfect storm for Colombia’s economy. Industrial gas prices have leapt 69%, inflating production costs and feeding a 5.68% inflation rate, while households see a 23% rise in heating bills. Grid reliability is also at risk, with increased reliance on thermal plants heightening the chance of brownouts. Policymakers must weigh short‑term import contracts against long‑term energy diversification, potentially revisiting exploration incentives or accelerating renewable integration to stabilize the nation’s energy landscape.