Ecuadorean heavy sour crudes fell to record-wide discounts to WTI on Tuesday as higher freight prices and strong competition with other similar-quality crudes weighed on prices.
Heavy sour Napo fell by $8.70/bl on 6 October to a $26.50/bl discounts to January Nymex WTI, equivalent to $60.92/bl using that day's settlement of the benchmark. This is the widest discount assessed by Argus since it launched the assessment in 2003.
Heavy sour Oriente dropped by $6.13/bl to a $14.13/bl discount to WTI, totaling $73.30/bl — its lowest level since January 2009.
Freight rates from Ecuador to the US west coast rose by $1/bl over the past two weeks, although buyers typically shuttle Ecuadorean crude for transfer onto larger vessels at a ship-to-ship (STS) transfer zone offshore Panama. This is due to requirements that all Ecuador crude must be exported from the country's ports by ships run by state-owned company Flopec.
The greatest impact on crude prices likely stems from higher 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.
Higher shipping costs have pressuredcrude prices across Latin America, but 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 have also faced stronger competition from rising Canadian crude exports to China and the US west coast, both Ecuador's main 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.
