A country can simultaneously profit from a war and pay for it. That is exactly what is happening to Colombia: War in the Middle East is making Colombia richer. The conflict between Iran, Israel, and the United States has driven Brent crude above US$110 a barrel, with spikes reaching US$119. Prices have climbed 55% since hostilities began.
Since Colombia’s reference oil is Brent, this windfall comes with a catch built into Colombia’s own subsidy system.
How the Middle East set the energy market on fire
The trigger was a joint U.S.-Israeli strike on South Pars, the world’s largest natural gas field, located in Iran. The attack sent shockwaves through global energy markets on March 19, 2026.
Iran hit back hard, targeting energy infrastructure across the Gulf. Qatar’s Ras Laffan, the world’s largest Liquefied Natural Gas (LNG) export terminal, sustained serious damage and has been offline since early March, according to CNN. The facility handles near 20% of global LNG supply.
In Kuwait, drone strikes forced the shutdown of refineries at Mina al-Ahmadi and Mina Abdullah, which together process over one million barrels per day. Explosions struck Saudi Aramco terminals in Riyadh, and a blast in Bahrain damaged a critical bridge connecting it to Saudi Arabia.
At the center of the crisis sits the Strait of Hormuz, a narrow waterway between the Persian Gulf and the Gulf of Oman. Roughly 20% of the world’s traded oil and a similar share of gas move through this 39-kilometer gap every day.
Iran’s new Supreme Leader, Mojtaba Jamenei, called the blockade “fundamental.” If the closure holds, analysts warn, oil could reach US$200 a barrel.
To ease domestic fuel shortages, U.S. President Donald Trump temporarily suspended the Jones Act, a 1920 law requiring that all cargo shipped between American ports travel on vessels built, owned, and crewed by American citizens and companies.
Suspending it opens those routes to foreign-flagged ships and cuts logistics costs. Trump also called for no further strikes on Iranian facilities, even as he admitted having advance knowledge of the South Pars attack.
Colombia’s windfall: real, but limited
The war in the Middle East is making Colombia richer, while the country ranks fifth among Latin America’s oil producers, pumping an average of 750,000 barrels per day and sitting 22nd globally. The government built its 2026 financial plan around a Brent price of US$59 a barrel. With oil now trading above US$110, each barrel sold generates a surplus of more than US$50 over that baseline.
Oscar Rincon, president of Acipet, the Colombian Association of Petroleum Engineers, told El Nuevo Siglo that producer nations in the region “tend to benefit when international crude prices rise, as they receive higher income from their exports.” Ecopetrol, the state-controlled energy company that accounts for 70% of national output, stands to gain the most.
Yet the picture is more complicated than the numbers suggest. Former Minister of Mines and Energy Amylkar Acosta cautioned in El Tiempo that high oil prices do not fix structural fiscal problems. Colombia’s projected deficit for 2026 stands at 32 trillion pesos, roughly US$8.6 billion, and a commodity windfall does not close that gap, he argued.
Luis Fernando Mejia, CEO of Lumen Intelligence, went further. Most of the extra tax revenue will not arrive in 2026 at all, he told El Nuevo Siglo. It will flow in as extraordinary dividends to whichever government takes office in 2027.
What this means for ordinary Colombians
The real catch lives inside a mechanism most Colombians have never heard of. The Fuel Price Stabilization Fund (FEPC) covers the gap between what domestic producers receive and what fuel costs on the international market.
When oil prices rise, the government absorbs the difference through subsidies to keep pump prices stable. Those subsidies accumulate as debt, and the bill keeps growing.
The previous administration handed over a FEPC deficit of 36 trillion pesos and managed to pay down 16 trillion before leaving office. The current government has added 31 trillion more since 2023: 19 trillion that year, 8 trillion in 2024, and 4 trillion in 2025, according to Ecopetrol’s financial statements.
The fund’s outstanding balance stood at 3.9 trillion pesos at the close of the third quarter of 2025. The new price shock pushes it higher again.
For drivers and households, the pressure is already showing. The diesel subsidy now exceeds 3,500 pesos per gallon. The gasoline subsidy sits at around 1,500 pesos, even after a 1,000-peso reduction applied over the past two months.
Energy analyst Sergio Cabrales told Semana that diesel carries the broadest inflationary risk because it is “the main fuel for freight transport that moves food and goods across the country.” Should oil reach US$150 a barrel, gasoline prices would need to rise by around 6,200 pesos per gallon, according to estimates by Julio Cesar Vera, director of Fundacion Xua Energy, published by El Colombiano.
Natural gas markets face a similar strain. The Henry Hub, a distribution center in Louisiana that the global gas industry uses as its main price benchmark, climbed to $3.50 per BTU (British Thermal Unit, the standard measure of energy content in natural gas), up from $2.90 before the conflict began.
The International Energy Agency (IEA) warns that this conflict could trigger the largest supply disruption in the history of the energy sector. “There is no end to the conflict in sight, and that is the problem for investors,” Adam Sarhan of 50 Park Investments told AFP news agency.
Whether Colombia’s windfall proves lasting or fleeting will depend less on oil markets than on diplomacy. On that front, the horizon remains deeply uncertain.