Mexico falls behind in the new global oil map
Crude from other Latin American producers is gaining ground in global markets after months of conflict involving Iran, while Mexico has largely missed out on the price boom
The image of Brazilian President Luiz Inácio Lula da Silva smiling aboard an offshore tanker at the mouth of the Amazon River, his hands stained with oil after Petrobras announced a major hydrocarbon discovery, encapsulates Latin America’s current energy moment. The global oil landscape is being reshaped after months of war in Iran, creating new opportunities for producers across the region. From Argentina and Brazil to Venezuela and neighboring Guyana, oil from the Americas, including U.S. crude, is finding its way to new markets. Mexico, however, stands apart and is missing out on the benefits of higher prices.
The country has seen its crude exports fall to historic lows, averaging around 500,000 barrels per day. The decline reflects both lower production, now hovering at roughly 1.3 million barrels a day, and an energy policy that prioritizes supplying domestic refineries and meeting internal fuel demand. Against that backdrop, Mexico’s state-owned oil giant Pemex reported revenues of about $1.3 billion in June, up 61.6% from a year earlier, but not enough to repair its finances or establish Mexico as a reliable supplier in a market hungry for crude.
The closure of the Strait of Hormuz has become a breaking point for the global energy system. The U.S. Energy Information Administration (EIA) estimates that shipments of liquid hydrocarbons through the waterway averaged about 4.9 million barrels per day in the second quarter of 2026, down from 21.6 million in the final quarter of 2025, before the outbreak of a conflict that has lasted far longer than U.S. President Donald Trump had promised. According to Columbia University’s Center on Global Energy Policy, Latin America was already on track to become the leading source of oil supply outside the Organization of the Petroleum Exporting Countries (OPEC), but the war has only highlighted the region’s strategic importance to global demand.
“North and South America have gone from matching the Middle East to now producing roughly 20% more than the Middle East,” says Nick Wayth, chief executive of the Energy Institute, a professional organization for the sector, while presenting the figures. “That is driven mainly by the United States, but also by Brazil, Guyana and other parts of the Americas. Certainly, there are clues there as to why the current situation has not become the crisis that was predicted at the start of the year.”
Brazil, Latin America’s largest crude exporter, producing about 4.5 million barrels a day, continues to hold auctions for exploration of its vast pre-salt reserves while assessing the recent discovery off the mouth of the Amazon River. Argentina has also launched tenders to explore an offshore area along its maritime border with Uruguay that could complement the vast reserves of Vaca Muerta. Guyana, meanwhile, has emerged as a major new player in the Caribbean: in just a few years it has lifted output to nearly 750,000 barrels per day, roughly 7% of the regional total, and expects further growth. The equation is completed by Venezuela, which is in the midst of a recovery of its oil industry under Washington’s financial oversight.
“But Mexico has not opened any bidding rounds,” stresses Alma Porres, a specialist in Mexico’s oil sector. This year, Pemex has signed around a dozen joint ventures in an effort to boost output, but it is not currently holding auctions. “Even the United States is opening up deepwater areas in the Gulf of Mexico,” she adds.
In August, Washington launched a tender for a vast offshore area to stimulate domestic production amid geopolitical volatility. On Thursday, meanwhile, Trump announced tougher economic sanctions on Iran, describing them as a form of “economic warfare.”
Mexico’s export crude blend has gained about $20 a barrel since the conflict began. Yet much of that benefit is being eroded by Pemex’s high operating costs, which, according to an analysis by Banamex, still posted a cumulative net loss through June. Greater use of crude for refining and domestic consumption also carries an opportunity cost for public finances, reducing export revenues and oil earnings. “Progress in reducing financial debt and liabilities to suppliers continues to depend largely on support from the federal government, at a time of growing pressure on public finances,” the bank notes. Although Pemex managed to cut its debt by 9% compared with the end of 2025, it still carries liabilities totaling $77.5 billion.
The efficiency of the state-owned company’s refining system also remains under scrutiny. Estimates by the Mexican Institute of Finance Executives (IMEF) suggest that the public refining business generates losses of at least $10 billion a year. The Mexican government of President Claudia Sheinbaum has also resorted to tax measures to subsidize gasoline and diesel prices, sacrificing part of the windfall revenue generated by Mexican crude trading at close to $80 a barrel.
“From those limited additional revenues, you have to subtract the $10 billion we are losing by not refining gasoline efficiently and by importing certain petrochemical products,” said Víctor Manuel Herrera of the IMEF at a press conference. “We are still importing 400,000 barrels of gasoline a day, mainly from the U.S., and those are also priced higher than before. In reality, because we are a net energy importer, there is no benefit to Mexico in this entire process.”
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