Mexico: end of crude oil exports from 2023
Mexico will suspend crude oil exports in two years' time in an effort to focus on domestic energy self-sufficiency, according to a Bloomberg article.
The move is part of President Andres Manuel Lopez Obrador's plan to increase local fuel production to reduce dependence on imported fuels. After all, it seems absurd to export crude oil and import finished products, if you have the necessary funds to invest in refining.
The announcement of the phasing out of exports was made by Pemex CEO Octavio Romero, who also said Mexico will cut oil exports by more than 50% from 2022, to 435,000 barrels per day.
Currently, according to US data, Mexico is the third largest oil exporter to the Americas, after the United States and Canada. Energy information administration.
The main destinations of its crude oil are its northern neighbors in North America and China, India and South Korea, as well as European countries. An export cut could push some of these importers to seek alternative suppliers.
Demand for fuel in Mexico increased during the pandemic, but local oil production was unable to keep up with it. President Lopez Obrador plans to build a new refinery with a capacity of 340,000 barrels per day to cope with the scarce refining capacity, at a cost of $ 12.4 billion, according to calculations earlier this year, as reported by Argus.
The cut in Mexican exports will hit hard the activity of the US refineries on the Gulf coast, already badly hit by the end of imports of “super heavy” crude from Venezuela. this choice also risks hitting the North American oil market, leading to increases in the USA, also because, due to Biden's policy, American producers are still reluctant to increase their production. At the same time, many doubt that Pemex can actually meet the president's demands for such a large increase in refining due to a lack of capital.
Thanks to our Telegram channel you can stay updated on the publication of new articles of Economic Scenarios.
The article Mexico: end of crude oil exports from 2023 comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/messico-fine-dellexport-di-petrolio-grezzo-dal-2023/ on Mon, 03 Jan 2022 10:13:21 +0000.