Bolivia possesses domestic oil resources, producing fields, pipelines and refineries, but its petroleum system no longer supplies enough liquid fuel for the national market. Falling production has transformed the sector from a source of energy independence into a major economic and supply-security problem.
The country has proved crude oil reserves estimated at approximately 241 million barrels. These reserves are modest by regional standards and are much smaller than Bolivia’s historically important natural gas resources. Much of the country’s liquid output also consists of condensate and natural gasoline produced alongside natural gas rather than large volumes from dedicated crude-oil fields.
Bolivia’s oil and gas production is concentrated mainly in the southern and eastern parts of the country, including Santa Cruz, Tarija, Chuquisaca and Cochabamba. The state-owned company Yacimientos Petrolíferos Fiscales Bolivianos, or YPFB, controls the central parts of the hydrocarbon system, including commercialization, refining, transport and fuel imports.
For many years, domestic production and low regulated fuel prices supported a sense of supply stability. That model weakened as mature fields declined, exploration failed to replace output and investment remained below the level required to develop new reserves. At the same time, demand for gasoline and diesel continued to rise.
The resulting gap is now filled through imported crude and, more importantly, imported finished fuels.
Domestic Liquid Production Has Fallen by More Than Half
YPFB data show the scale of the decline. Bolivia produced approximately 50,900 barrels per day of regulated liquid hydrocarbons in 2018. By 2025, domestic output had fallen to about 23,300 barrels per day.
This decline reflects the aging of established fields and the close relationship between oil and natural gas production. When output from gas fields falls, the associated condensate and natural gasoline available to refineries also decrease. Bolivia therefore cannot treat its oil and gas production problems as completely separate issues.
The country still has undeveloped prospects, but exploration has not produced enough commercial discoveries to reverse the trend. Geological risk, slow project development, limited access to capital and uncertainty over contract terms have restricted upstream activity. Several international companies have operated in Bolivia, but state control and the fiscal framework introduced after the 2006 nationalization reduced the attractiveness of major new investment.
Small discoveries or improved recovery from mature fields may slow the decline, but they are unlikely to solve the supply problem quickly. New commercial production requires seismic work, exploratory drilling, field appraisal, development wells and transport connections. These stages can take years even when financing and approvals are available.
Bolivia’s oil challenge is therefore not simply a shortage of geological resources. It is a problem of converting remaining resources into dependable production under commercially workable conditions.
Refineries Have Capacity but Lack Domestic Feedstock
Bolivia’s principal refineries are the Guillermo Elder Bell refinery in Santa Cruz and the Gualberto Villarroel refinery in Cochabamba. YPFB operates both facilities, which produce gasoline, diesel, jet fuel, liquefied petroleum gas and other petroleum products.
The national refining system has installed capacity of roughly 68,000 barrels per day. However, falling domestic liquid production has left much of that capacity unused. In 2025, YPFB reported domestic liquid output of approximately 23,260 barrels per day and only a small additional volume of imported crude. The result was an estimated idle refining capacity of more than 65%.
This creates a difficult imbalance. Bolivia owns refining assets capable of processing much more oil, but the country lacks enough domestic crude and condensate to keep them operating near their design level. At the same time, it spends foreign currency importing finished gasoline and diesel.
The government has therefore moved toward importing more crude oil for processing inside Bolivia. Imported crude can increase refinery utilization, preserve domestic refining employment and replace part of the cost of buying finished products abroad.
The planned supply route demonstrates Bolivia’s geographical constraints. Crude arriving by ship is unloaded through YPFB’s facilities at the Chilean port of Arica, stored at the company’s land terminal and then transported inland to Bolivian refineries. This system allows landlocked Bolivia to access seaborne crude markets, but it adds transport, storage and logistical costs.
In February 2026, a new regulatory framework allowed refineries to import crude directly. YPFB also announced plans to increase crude imports and reactivate operations at the Santa Cruz and Cochabamba facilities. The commercial success of this policy will depend on the price and quality of available crude, transport capacity and the refineries’ ability to convert imported feedstock into the products Bolivia needs most.
Diesel Dependence Is the Weakest Part of the Supply Chain
Bolivia’s most serious petroleum imbalance is diesel. Diesel is essential for freight transport, agriculture, mining, construction and public transport, making shortages economically disruptive.
YPFB reported that imports supplied almost 91% of Bolivia’s diesel market in 2025. Domestic diesel production had fallen to around 206,000 cubic metres for the year, compared with imports of approximately 2.18 million cubic metres. Biodiesel made only a small additional contribution.
Gasoline dependence is lower but still substantial. Imported gasoline represented about 55% of supply in 2025, compared with much smaller import shares earlier in the previous decade. Domestic gasoline production fell while national sales continued to grow.
This dependence creates several points of vulnerability. YPFB must secure foreign currency, negotiate international contracts, arrange shipping or cross-border trucking and move fuel through a landlocked distribution network. Delays at ports, border crossings or road blockades can quickly affect service stations.
Foreign-exchange pressure has made the problem more severe. When the state cannot obtain enough dollars at the official rate, financing fuel imports becomes more difficult even when international suppliers are available. Recent shortages have demonstrated that Bolivia’s petroleum problem is connected to fiscal policy, currency reserves and transport logistics as well as domestic production.
Fuel Subsidies Hid the Cost of Declining Production
For almost two decades, Bolivia maintained some of South America’s lowest regulated fuel prices. The government purchased imported fuel at international prices and sold it domestically at a much lower controlled price.
The policy helped households, transport operators, farmers and businesses, but it became increasingly expensive as domestic oil production declined. By 2024, fuel imports had risen from approximately 4% to 9% of gross domestic product compared with earlier years, according to IMF analysis. Imported fuels were being sold at around half their international cost.
Low prices also encouraged consumption and created incentives for fuel to be diverted or smuggled into neighbouring countries where it could be sold for more. This increased the volume the government needed to import and subsidize.
The government removed the broad fuel subsidies in late 2025 and sharply raised regulated diesel and gasoline prices. The change was intended to reduce fiscal pressure, limit smuggling and improve the commercial conditions for private imports. However, higher fuel prices also increased costs across transport, food production, mining and other parts of the economy.
This policy shift does not create additional oil production by itself. It reduces part of the financial distortion surrounding the market, but Bolivia still needs reliable supply contracts, sufficient foreign exchange, effective distribution and investment in upstream production.
New Investment Rules Will Determine Whether Output Can Recover
Bolivia is now attempting to reverse years of declining hydrocarbon production by revising its legal and commercial framework. The government has proposed clearer contracts, more flexible fiscal terms and renewed cooperation with international operators.
Petrobras is one of the companies Bolivia has sought to re-engage. A stronger relationship with experienced regional operators could provide capital, technical knowledge and access to exploration technology. Nevertheless, investors will assess whether new terms offer long-term stability and whether projects can earn an acceptable return after taxes, royalties and state participation.
Domestic production is unlikely to return rapidly to its previous level. The more immediate strategy is to combine several measures: import additional crude, use more refinery capacity, diversify fuel suppliers, allow greater private participation and expand biodiesel or ethanol blending where practical.
Over the longer term, Bolivia must either discover and develop new liquid resources or accept continued dependence on imported petroleum. Its existing refineries and transport infrastructure remain valuable, but they cannot compensate for a sustained shortage of feedstock.
The direction of the sector will depend on whether regulatory reform leads to actual drilling and commercial discoveries. Until that occurs, Bolivia’s oil industry will be defined less by its remaining reserves than by the cost and difficulty of supplying enough gasoline and diesel to the domestic economy.
