Peru’s oil and gas sector is reporting a severe contraction in both production and investment during the first half of 2026, intensifying pressure on the new administration to intervene.
Industry associations warn that without immediate policy support, the downturn could accelerate, threatening key infrastructure projects including the Lote Z-69 refinery in Talara.
The decline in output and exploration activity reflects a broader malaise in the country’s energy markets, where capital expenditure has continued to fall through the first two months of the year.
Operators are citing structural hurdles and regulatory uncertainty as primary drivers of the slowdown, leaving the sector vulnerable to further erosion.
The situation in Peru arrives as global markets focus on supply replenishment efforts elsewhere.
While governments worldwide are preparing to purchase millions of barrels to rebuild strategic reserves depleted during recent geopolitical conflicts, emerging markets like Peru are struggling to maintain domestic production levels.