Colombia’s illicit cocaine trade generated an estimated $16.5 billion in 2024, more than the roughly $15 billion the country earned from crude oil exports. The comparison points to a growing strain in the legal energy sector as oil production declines, even though oil remains Colombia’s largest source of export revenue. It also puts the scale of the illicit economy into sharper view: this is an estimate of revenue, not a measure of what ultimately reaches producers or any government accounts.
The figures don’t mean cocaine has displaced oil as Colombia’s leading legal export. Oil and coal exports combined still exceed cocaine revenues. But the comparison is telling because it puts a fast-growing illicit trade beside a major sector facing long-running production constraints. This is more significant than it looks.
Volume drove cocaine revenues higher
The figures come from research by EAFIT University, cited by UPI. Cocaine revenues amounted to 4.4% of Colombia’s gross domestic product in 2024. The researchers attributed the increase to higher production volumes, rather than higher domestic prices, a distinction that matters when interpreting the headline total.
“It is not that cocaine has become more expensive in the domestic market. On the contrary. What we are seeing is a massive increase in the volume of pure production,” economist Santiago Tobon, one of the study’s authors, said.
That explanation suggests the larger revenue estimate reflects more product entering the market, not stronger pricing. The figure remains an estimate, and the source material doesn’t provide enough detail to assess how it was calculated or how much uncertainty surrounds it. Still, the direction described by the study is clear: production growth is the central factor.
Oil and coal exports combined still exceed cocaine revenues. Yet the illicit trade’s scale has become more visible against a backdrop of falling oil output and continuing pressure on Colombia’s export mix. If you’re working in this space, the key distinction is between the size of an illicit market and the legal economy’s capacity to generate export earnings and public revenue.
Oil production faces persistent constraints
State-owned Ecopetrol forecast average production of 730,000 to 740,000 barrels of oil equivalent per day this year. That would be below the more than 750,000 barrels per day recorded in the first half of 2025 and well short of the 1.03 million barrels per day produced in 2015. Those comparisons point to a sustained decline, though the reported measures cover different periods and should be read in that context.
A period of higher oil prices following the Strait of Hormuz shutdown prompted Ecopetrol’s chief executive to say the company might revise its capital spending plans. With prices back near pre-conflict levels, that potential adjustment may no longer be necessary. A temporary price rise can change a producer’s near-term budget calculations, but it doesn’t resolve the underlying challenge of maintaining output from mature fields or operating amid security risks.
The longer-running production decline reflects deeper constraints: natural field depletion, pipeline sabotage and conflict, and weaker investment. These pressures can reinforce one another. As fields produce less, companies may need to spend more to sustain output, while security problems and uncertainty can make new investment harder to justify.
“Today more investment is required to produce the same amount of oil, due to the natural depletion of the fields and the complexity of the operating environment,” the president of the Colombian Oil and Gas Association said last year.
That is a difficult cost equation for a sector facing declining production. Higher prices may improve the case for spending, but they don’t automatically make projects easier to develop or reverse the effects of depletion.
Energy transition plans meet a revenue challenge
President Gustavo Petro has made shifting the economy away from hydrocarbons a priority, with a $40 billion commitment to the energy transition. Oil revenues remain important to financing that agenda, leaving the government with a fiscal tension: reducing dependence on hydrocarbons while relying on them to fund the change. The policy aim and the revenue base are pulling in different directions.
Colombia’s hydrocarbons agency put proven oil reserves at 2.04 billion barrels as of 2024, defining them as volumes that can be profitably extracted at prevailing prices. That definition makes reserves sensitive to both economics and operating conditions. Improved technology could raise estimates by increasing recovery from existing fields, although policies aimed at curbing production work in the opposite direction.
Since taking office in 2022, Petro has halted new oil exploration and raised taxes on extractive industries. Colombia has also become reliant on natural gas imports after domestic production failed to meet demand. That dependence shows why the energy transition involves more than choosing between oil production and climate goals: the country must also manage the supply of fuel its economy currently uses.
The country’s policy direction could shift after Abelardo de la Espriella, who campaigned for increased oil and gas production, defeated left-wing candidate Iván Cepeda in this week’s presidential election, according to Al Jazeera. A change in political emphasis could alter expectations among producers, but a campaign position alone doesn’t establish how quickly policy or investment would change.
Policy change would take time to affect investment
A stronger emphasis on oil and gas could alter the balance between legal energy exports and illicit revenues, while helping address gas import dependence. But any policy shift would take time to affect production. Exploration decisions, field development, security conditions and the cost of operating in depleted fields all shape the timeline. Here’s the thing: announcements can change expectations quickly, while physical output responds slowly.
That gap matters for public finances and export earnings. A government that wants to reduce reliance on hydrocarbons still needs to account for the revenue they provide today, while a government seeking more production must contend with the investment and operating conditions that have constrained output. Neither objective can be assessed from headline prices or reserve estimates alone.
For now, the EAFIT estimate captures two distinct trends: cocaine revenues rose with production, while Colombia’s oil sector continues to contend with declining output. The comparison is a warning about the pressure on the country’s legal export base, though it doesn’t by itself show that illicit earnings can replace the fiscal or economic role of oil. And yet, the contrast is hard to ignore.
Whether a new administration can change that trajectory remains an open question for Colombia’s energy investment and export base. The answer will depend on whether policy intentions translate into sustained investment and production, as well as on conditions the government can’t control, including field depletion and operating risks.