Mexico Crude Oil Exports to U.S. Collapse to 1977 Levels

One of the most anticipated and potentially impactful refinery startups in North America in years is the Dos Bocas project (officially the Olmeca Refinery), a 340 Mb/d plant under development by Mexico’s state-owned Petroleos Mexicanos (Pemex) in the southeastern state of Tabasco. The project was seen as the cornerstone of Pemex’s plans to reduce Mexico’s dependence on the U.S. for refined fuels. Construction began in 2019 with startup originally scheduled for 2022, but that timeline was never really feasible, and the Mexican government has issued multiple public statements since mid-2023 proclaiming that construction was complete and startup was imminent. However, almost a year has passed and there is no indication that any meaningful operations have occurred. So how close is Dos Bocas to startup and, more importantly, full (or close to full) production? In today’s RBN blog, we’ll provide our views on those vitally important questions. 

The U.S. has become an oil-exporting powerhouse in recent years, propelled by booming shale production, notably from the Permian Basin. U.S. crude oil now flows more freely than ever to help meet global demand, including to Europe, which increasingly turned to the U.S. following Russia’s invasion of Ukraine two-plus years ago, but exports have slowed recently. In today’s RBN blog, we examine a half-dozen reasons why the export surge has tapered off and why it may not change much in the weeks ahead. 

Mexico’s efforts to start up the newest addition to its refining system — the Olmeca refinery — are causing headaches for global buyers of its crudes. Few are convinced that the plant near the country’s key Dos Bocas oil port is ready for service. Yet its operator, Petróleos Mexicanos (Pemex), surprised many with cuts to its crude exports in April, which were reportedly made to ensure the complex will have enough feedstock and could continue through 2024. In today’s RBN blog, we will discuss what led to the export cuts, the implications for importers, and potential replacement options.