The Colombian peso closed higher on Wednesday, driven by oil price volatility following President Donald Trump's announcement of a blockade on sanctioned tankers to Venezuela. Crude prices rose over 2%, with Brent at US$60.33 per barrel. President Gustavo Petro warned that a drop to US$55 per barrel would make oil production in Colombia unprofitable.
The dollar in Colombia recorded a higher close of $3,866.73 on Wednesday, representing an increase of $19.63 from the Representative Market Rate (TRM) of $3,847.10. The currency fluctuated between a low of $3,840 and a high of $3,888, with 2,540 transactions for a total of US$1,530 million. This movement occurred amid U.S. unemployment data showing a cooling labor market but no rapid weakening, which delayed bets on rate cuts. According to Bloomberg, the dollar rose the most in nearly a month, pushing the 10-year Treasury yield to 4.17%.
The main volatility came from oil prices, which fell below US$60 per barrel on Tuesday for the first time since May due to signs of excess supply and progress in Russia-Ukraine peace talks. However, on Wednesday, prices rebounded over 2% after Trump's announcement of a full blockade on all sanctioned tankers entering and leaving Venezuela, now deemed a foreign terrorist organization. Brent gained 2.4% to US$60.33 per barrel, and West Texas Intermediate (WTI) rose 2.6% to US$56.69, per Reuters.
"The Russian risks are well telegraphed, but there are clear risks to Venezuelan oil supply," said Warren Patterson, ING analyst. Andrea Gabellone, global equity director at KBC Global Services, stated: “November U.S. employment data confirms the previously expected rate trajectory more than a new catalyst.”
In this context, President Gustavo Petro warned on X that if oil drops to US$55 per barrel, most Colombian wells become unprofitable, even in the Permian basin, key for Ecopetrol with 15% of its production and 14% of its EBITDA. Brent traded at US$59.75 the previous day. Each dollar drop in crude implies monthly losses of US$14.4 million for Colombia, according to Corficolombiana, or US$16 million in exports per Acipet. Former Mines and Energy Minister Amylkar Acosta estimated a US$10 drop reduces GDP by 0.4 percentage points. This year, marked by tensions like Trump's tariffs and Middle East conflicts, the average price is US$14 below the US$74 projection.
