Mexico To End Oil Exports In 2023

By Charles Kennedy - Dec 29, 2021, 10:30 AM CST

https://oilprice.com/Latest-Energy-News/....

The export phase-out announcement was made by the chief executive of Pemex, Octavio Romero, who also said that Mexico would reduce oil exports from next year by more than 50 percent, to 435,000 bpd.

Currently, Mexico is the third-largest oil exporter in the Americas, after the United States and Canada, according to data from the U.S. Energy Information Administration.

The main destinations for its crude are its northern neighbors in North America and China, India, and South Korea, as well as European countries. A cut in exports could make some of these importers look for alternative suppliers.

If Mexico indeed stops exporting crude oil, this will hit U.S. Gulf Coast refiners hard as it will cut off yet another source of heavy oil, for which their refineries have been configured. Another major source of heavy crude used to be Venezuela, but U.S. sanctions against Caracas ended the flow of heavy Venezuelan crude to the Gulf Coast.

According to the Bloomberg report, there are also doubts about Pemexs own capacity of refining all of its crude oil output. A long period of underinvestment in refinery maintenance has reduced operating capacity significantly, and it is questionable whether the state energy giant would be able to turn things around in just two years.

Pemex is currently the most indebted oil company in the world despite major efforts by the Lopez Obrador government to support it through tax breaks and other debt-relief measures