Ecuadorean heavy sour crudes fell to multi-year-record-wide discounts to WTI on Tuesday amid a hike in freight prices and strong regional competition with other similar-quality crudes.
Heavy sour Napo dropped by $8.70/bl on 6 October to a $26.50/bl discounts to January Nymex WTI, which is equivalent to $60.92/bl considering the day's settlement of the benchmark. This is the widest discount ever assessed by Argus since it launched the assessment in 2003.
Heavy sour Oriente's assessment dropped by $6.13/bl to a $14.13/bl discount to WTI, which totaled $73.30/bl, Oriente's lowest level since January 2009.
Freight costs rose by $1/bl from Ecuador to the US west coast in the past two weeks. Buyers however usually take Ecuadorean crude to a ship-to-ship (STS) transfer zone offshore Panama to move it onto larger vessels before shipping it to the final destination. This happens because Ecuador requires all crude should be exported from the country's ports by ships run by state-owned company Flopec.
The highest impact on crude prices is likely linked to the hike in freight costs for long haul voyages. The cost to ship a cargo from North America's Pacific coast to China rose by $7/bl since 1 October.
While the rising freight costs have pressuredcrude prices across Latin America, heavy sour grades have been particularly affected since they were already trending at multi-year lows before the surge in shipping costs. This was mainly because of the return of Venezuelan crude exports to the non-sanctioned market starting in January, following the US capture of former president Nicolas Maduro and a warming of relations between the countries.
Ecuadorean grades are also more directly affected by the increase in Canadian crude exports to China and the US west coast, both of Ecuador's main export markets. Canadian crude exports to China, for example, rose from about 100,000 b/d in 2024 to 278,000 b/d in the first half of 2026.
