Despite ongoing efforts by Pemex to boost production of gasoline, diesel and jet fuel, the Mexican market still depends on imports from the U.S. for just over half of its refined product needs. And moving nearly 700 Mb/d of transportation fuels to population centers south of the border is no easy task.
U.S. exports of gasoline, diesel and jet fuel to Mexico have been mostly rising the past 15 years. Over that same period, the Mexican government’s policy on the import-related roles of state-owned Pemex and private companies has zigged and zagged, slowing efforts to develop new midstream infrastructure.
Dangote eyes a massive expansion but still struggles to reach capacity. Dos Bocas faces steeper hurdles. New refineries worldwide keep hitting the wall as bold plans collide with tough execution.
Mexico’s LNG sector has seen notable advancements in the past year, including new export project announcements and strategic investments. But many of the proposed LNG projects require extensive pipeline buildouts — no easy task south of the border and perhaps the biggest impediment most of the export projects face. In today’s RBN blog, we’ll look at where things stand with Mexico’s LNG sector and the export projects under development.
President-elect Trump’s plan to impose a 25% tariff on all imported goods from Canada and Mexico — including crude oil — has raised concern among U.S. refiners, many of which depend heavily on those imports and would face serious challenges in replacing them. The question is, given that dependence and the incoming administration’s pledge to reduce energy costs, will refiners — and oil producers in Canada and Mexico — succeed in their efforts to exempt crude oil from the tariff plan? In today’s RBN blog, we discuss the degree to which U.S. refineries incorporate Canada- and Mexico-sourced oil in their crude slates, the potentially devastating impacts of a tariff on Canadian crude in particular, and the odds for and against U.S. tariffs on oil imports from its neighbors.
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.
The prospect of decreased crude oil supplies from Mexico, the top international supplier to the U.S. Gulf Coast (USGC), is creating uncertainty among heavy crude-focused refineries. Mexico’s state-owned energy company, Petróleos Mexicanos (Pemex), instructed its trading unit to cancel up to 436 Mb/d of crude exports for April to supposedly focus on processing domestic oil at its new 340-Mb/d Dos Bocas refinery and/or its existing plants. While the refinery’s startup is likely not nearly as imminent as Pemex says, the cancellation of Mexican crude imports could be problematic for U.S. refiners with plants built to run heavy crude, a necessary ingredient to optimize operations and yields. Adding to the complexity of the situation is the upcoming startup of the Trans Mountain Pipeline expansion (TMX) and the recent reinstatement of U.S. sanctions on Venezuelan crude. In today’s RBN blog, we’ll examine the potential fallout resulting from Pemex’s decision at a time when heavy crudes elsewhere are also becoming less available.
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.
Mexico’s state-owned Petróleos Mexicanos, the second-largest exporter of crude oil to the U.S. after Canada, said in late December that it will slash its export volumes in 2022 and eliminate them completely in 2023. The plan is premised on Pemex’s expectation that, with increased utilization of the company’s six existing refineries and the impending start-up of a new one, it will need every barrel of the Maya, Isthmus, Olmeca, and other varieties of oil it produces. While at first glance it may seem that Mexico phasing out exports of crude would pose a major challenge to some U.S. refineries, there’s good reason to believe that in reality it won’t. In fact, as we discuss in today’s RBN blog, there may be less to Pemex’s planned export phase-out than meets the eye.
