Key facts
- A predicted Super El Niño event in 2026 could cause severe droughts in Colombia, impacting hydroelectric power generation.
- Colombia's reliance on imported liquefied natural gas (LNG) is projected to increase to over 32% by 2026.
- Natural gas prices have surged 36% between 2022-2024 and are expected to rise another 25% in 2026.
- Proven natural gas reserves in Colombia fell 17% year over year to 1.717 trillion cubic feet by the end of 2025.
- President Gustavo Petro's policies, including banning new exploration contracts and increasing taxes, have impacted domestic production.
- Colombia's fiscal deficit is expected to reach 6.6% of GDP in 2026, making it the world's third-largest.
Scientists are forecasting a severe 'Super El Niño' event in 2026, which could trigger devastating droughts in Colombia and lead to an energy crisis. The anticipated reduction in hydroelectric power generation, coupled with dwindling domestic natural gas reserves and increasing reliance on expensive imports, is expected to strain the country's electricity grid and economy.
Colombia has been increasing its imports of liquefied natural gas (LNG) since 2016, a trend that is projected to accelerate. By 2026, over 32% of the nation's natural gas is expected to be imported, a significant increase from earlier predictions. This growing dependence on foreign supply is driving up natural gas prices, which have already surged by 36% between 2022 and 2024 and are anticipated to climb by another 25% in 2026. These rising costs will impact businesses and households, potentially fueling further inflation.
The nation's economy is already fragile, with a budget deficit projected to reach 6.6% of GDP in 2026, making it the third-largest globally. Inflation, currently at 5.84% annually, is expected to be exacerbated by costly LNG imports, which are essential for both commercial and domestic use. This situation is compounded by a significant decline in Colombia's domestic natural gas production, which has fallen by 15% year-over-year in April 2026 and is 36% lower than a decade ago.
This production decline is attributed to a lack of new discoveries and reduced output from key fields like Chuchupa and Ballena. Proven natural gas reserves have also fallen sharply, declining 17% year-over-year to 1.717 trillion cubic feet by the end of 2025, marking an 18-year low.
President Gustavo Petro's energy policies, aimed at reducing fossil fuel dependence, have included banning new exploration and production contracts and increasing taxes on energy companies. These measures, along with rising lawlessness in remote regions, have discouraged foreign investment and contributed to the decline in domestic output. Some companies, like Exxon, have exited the country seeking better opportunities elsewhere.
The combination of climate-induced energy shortages, declining domestic production, and costly imports poses a significant risk to Colombia's economy, potentially leading to higher interest rates, impacting industry and agriculture, and risking sharp drops in electricity supply.