Petróleos Mexicanos (Pemex), Mexico’s state-run oil giant, dramatically reduced its crude exports to unprecedented levels.
This strategic shift supports the government’s plan to refine more oil domestically, including at the new Dos Bocas refinery.
In March 2024, Pemex’s daily crude exports plummeted to 686,800 barrels, the lowest since record-keeping began in January 1990.
This marked a 27% decrease from the prior month and a 29% fall from the previous year.
Early April reports indicated that Pemex would cease certain export contracts. This decision aims to tighten the squeezed global oil market further.
Exports to the Americas experienced the most substantial reduction, dropping 34% to 403,150 barrels daily.
Shipments to Europe and the Far East fell by 17% and 9%, respectively.
The Istmo variety, a medium-grade oil, saw the steepest drop, plunging 41% from 312,700 barrels daily to just 184,000 in March.
Under President Andrés Manuel López Obrador, known as AMLO, Pemex is striving to satisfy Mexico’s demand for gasoline and diesel entirely.
Despite this push, the sector continues to report massive losses, negatively affecting Pemex’s credit ratings.
AMLO has vowed to reduce fuel costs by upgrading Pemex’s refineries and building a new one in his native Tabasco.
However, the refurbishment of the Tula and Salina Cruz facilities and the Dos Bocas refinery’s launch have faced significant delays.
This narrative captures the tension between nationalistic energy policies and global market realities.
As Pemex shifts focus, the broader implications for international oil supply and national economic health loom large, highlighting a pivotal moment in Mexico’s energy strategy.
Background
In the first quarter of 2024, Pemex experienced a significant financial downturn.
Profits plummeted by 91.7%, falling from MXN 56.735 billion ($3.40 billion) in early 2023 to just MXN 4.682 billion ($280.69 million) in the same period this year.
A recent submission to the Mexican Stock Exchange noted that rising sales costs, administrative expenses, financing, and taxes drove this sharp decline.
During this challenging period, Pemex’s revenues decreased by 3%, amounting to MXN 405.898 billion ($24.34 billion).
This reduction stemmed mainly from diminished domestic and export sales, influenced by the falling prices of crude oil and fuels.