Mexico’s state oil firm Pemex is holding discussions with crude buyers in Asia and Europe to potentially sell there its oil, which is now being taxed with a 25% tariff by its single biggest customer, the United States, a senior government official in Mexico told Reuters.
The trade wars in North America began in earnest earlier this week after the U.S. Administration imposed a 25% tariff on all imported goods from Mexico and Canada, with the exception of a 10% tariff on Canadian energy imports.
Mexico has seen its total oil exports drop off in recent years due to Pemex struggling with the worst decline in production in decades.
Still, Mexico exported more than 600,000 barrels per day (bpd) on average to the United States in 2024, according to data from the U.S. Energy Information Administration (EIA).
Of the total Pemex exports of 806,000 bpd of crude last year, 57% went to the United States.
Pemex’s total exports crashed by 44% in January, the lowest level since 1990, amid the continuous decline in production.
But the 25% U.S. tariffs on Mexican crude as of March 4 is prompting Pemex to seek alternative export markets.
Mexico will not be offering any discounts to make its crude more attractive to U.S. buyers now that the 25% tariff is in place, the government official told Reuters.
Instead, Mexico is in active talks with potential buyers in India, China, and other Asian countries.
“The good thing is that there's appetite for Mexican crude in Europe, in India, in Asia,” the Mexican government official told Reuters.
“There's demand for heavy crude and Pemex crude,” they added.
One trader believes that only refineries in Asia would be suited to process Mexico’s heavier crudes due to the refinery specifications to work with heavy crude grades.
By Tsvetana Paraskova for Oilprice.com
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