QUITO – Ecuador’s government is looking at the possibility of acquiring petroleum insurance to guarantee itself a minimum price for its crude oil exports, given the danger of a new international financial crisis.
The crisis in Greece and the financial situation in the United States have the government “very concerned,” President Rafael Correa said during his weekly report on the state of the nation.
The final decision on the insurance policy will be made in late July when it is anticipated that the Organization of Petroleum Exporting Countries, or OPEC, of which Ecuador is a member, will release a new report about the world crude oil situation along with market projections, the president said.
“We’re going to await that report and make the decisions in the case” at that time, Correa said.
“God knows nobody wants there to be a crisis in Europe, in the U.S., a heavy consumer of petroleum” because that could cause a dramatic fall in the price of crude, which currently stands at about $100 per barrel, Correa said.
The insurance policy would allow Quito to guarantee itself a minimum price of $70 per barrel for its oil and, if the international price were to fall below that threshold, the insurance would pay the country the difference, Correa said.
“We have decided to wait until the third week of July because the OPEC six-month report is being finished up” and its contents will be the key for determining whether or not to buy the insurance, the president said.