Record cocaine production impacts South American nation's oil industry

(OIL PRICE) – Colombia’s cocaine production continues to soar ever higher. For the fourth year straight, the United Nations Office on Drugs And Crime (UNODC) reported that Colombia’s 2022 cocaine output surged to yet another all-time high. Since the early 1980s, the tremendous profits generated by the narcotic have been responsible for fueling the strife-torn county’s civil conflict and heightened rural violence. Crime and violence are spiraling out of control in Colombia despite the country’s first leftist president Gustavo Petro, himself a former Marxist guerilla, committing to a policy of total peace. Rising crime, violence and conflict will roil an economy already struggling to grow, with Colombia’s oil industry being hit hard by cocaine-fueled conflict with many petroleum-rich regions located in or near coca-cultivating hotspots.

In a stunning development, the UNODC reported that Colombia’s 2022 coca harvest (Spanish) grew 24% year over year to 1.4 million metric tons, which had the potential to produce 1,738 metric tons of cocaine hydrochloride, also a 24% increase from a year earlier. This immense surge in cocaine production has sparked fears that the narcotic will generate far greater export earnings than Colombia’s primary export, crude oil, earning $18.7 billion for 2022 and $10 billion for the first eight months of 2023. According to Bloomberg, Colombia’s 2022 cocaine exports were worth $18.2 billion, or 5% of gross domestic product, which is slightly less than the $18.7 billion earned by oil.

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The tremendous and growing volume of cocaine being manufactured in Colombia, despite giving the economy a notable short-term boost, poses a threat to the Andean country’s legitimate industries, notably the hydrocarbon sector. Many of Colombia’s top-producing oil basins are located in areas that are known hotspots for coca cultivation and cocaine production. The top four zones, where coca cultivation and cocaine manufacturing dominate the local economies, are shown on the map below, with the highest density shown in red.

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