HomeNewsAnalysisWhy Oil Theft Spread Across Latin America During Pandemic
ANALYSIS

Why Oil Theft Spread Across Latin America During Pandemic

ARGENTINA / 1 OCT 2020 BY ALICIA FLÓREZ EN

From mostly being a lower-level criminal economy, oil theft has spread across Latin America during the coronavirus pandemic as a way for gangs to supply thriving black markets and shore up their finances.

But while most instances of oil theft concerned illegal taps on pipelines most commonly associated with Mexico, more daring criminal groups have attacked oil platforms out at sea or built their own makeshift refineries.

On September 15, in Ecuador, soldiers found a clandestine refinery in the province of Sucumbíos near a pipeline crossing the country’s border with Colombia. Pipes took the stolen oil from the pipeline to the facility 170 meters away, which had the capacity to refine up to 500 gallons of crude oil at a time and load it up onto boats.

In early September, Argentinean authorities dismantled a large-scale operation to steal gasoline from the country’s state-owned oil company, YPF. 21 people were arrested, including a number of the company’s staff and a local councilor in Lanús near Buenos Aires, for allegedly stealing oil worth $5 million a year from YPF facilities. The stolen oil was transported in tanker trucks to clandestine refineries and then sold illegally in gas stations.

SEE ALSO: Coverage of Coronavirus and Organized Crime

These were far from the only cases reported. Also in September, the United Federation of Oil Workers of Venezuela (Federación Unitaria de Trabajadores Petroleros de Venezuela – Futpv) denounced that certain oil companies were illegally selling off the limited production the country still has. Venezuela, which has the largest proven oil reserves in the world, has seen its thriving oil industry collapse to the point that it now sees gasoline smuggled in from neighboring Colombia, a complete reversal of former criminal dynamics.

In Colombia, Ecopetrol has sounded the alarm over a marked increase in illegal taps detected in its infrastructure. Between January and August 2020, it found close to 900 taps nationwide, compared to 747 detected in the same period of 2019. Most of these were found on the Caño Limón-Coveñas pipeline, largely located in the department of Norte de Santander, and are most likely connected to cocaine production. In April, InSight Crime reported on illegal refineries in Norte de Santander, manufacturing “pategrillo,” a low-quality fuel used in cocaine production.

In Paraguay, family clans are reportedly stealing oil from barges transporting it along the Paraná River and then selling it in local communities. Local media reports have explained that robberies have seen up to 70,000 liters of gasoline stolen in a single night. In August, a women was allegedly assassinated in the southwestern city of Pilar after making reports about such thefts. Since then, prosecutors have led renewed investigations but have also reportedly received threats.

And in Mexico, where oil theft has been a constant topic of debate in the last two years, tens of millions of barrels have been stolen during the coronavirus lockdown. And attacks on oil platforms out at sea have also increased. From January to June 2020, authorities registered 19 such attacks, compared to 20 in all of 2019 and 16 in 2018, according to the New York Times. In July, the US Embassy in Mexico even issued a special alert addressing pirates operating in Mexican waters.

InSight Crime Analysis

While oil theft has been a constant problem in countries like Mexico, it has become a criminal economy of choice during the pandemic, as other means of criminal income have suffered.

At a time of increased economic pressure and unemployment, black market demand for gasoline has soared from communities in central Mexico to villages at the Brazil-Venezuela border.

SEE ALSO: Coverage of Oil Theft

One journalist who has covered oil theft in Colombia told InSight Crime that as authorities have focused on enforcing a lockdown and cracking down on more violent forms of organized crime during the pandemic, oil theft has often flown under the radar.

In response, criminal groups have used a range of methods to extract oil from pipelines, showing how they have adapted to the demand and opportunity in each country. For example, smaller structures in Venezuela and Paraguay have intensified their activities in recent months, while large-scale rings, including corrupt officials, dedicated to extracting, refining and selling off the oil have been found in Argentina and Colombia.

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