Mexico to Halt Some Oil Exports, Further Squeezing Global Market
(Bloomberg) -- Mexico’s state-controlled oil company plans to halt some crude exports over the next few months, a move that would cut supply from a tightening global market.
Petroleos Mexicanos, also called Pemex, canceled contracts to supply its flagship Maya crude oil to refiners in the US, Europe and Asia, according to people with knowledge of the situation, who asked not to be named because the information is private.
The export cut, coming at a time when OPEC and its allies are already curbing production, threatens to drive up oil prices that are at a six-month high. Physical supplies — especially heavier, sour grades such as Maya — are tightening even further with Venezuelan exports set to fall after the reinstatement of US sanctions on its oil industry. JPMorgan Chase & Co. last week warned that global benchmark Brent could reach $100 a barrel this year.
READ: Mexico oil Exports Slump as Domestic Refining Cranks Up
![](https://assets.bwbx.io/images/users/iqjWHBFdfxIU/ihjrA8Npt5eQ/v0/-1x-1.png)
Pemex’s plan to suspend some exports is part of an effort to produce more domestic gasoline and diesel ahead of the June 2 presidential election, the people said. President Andres Manuel Lopez Obrador, whose term is coming to an end, won office with the promise of weaning the country off of costly fuel imports. His multi-year effort to revamp Mexico’s refining sector is finally paying off.
In February the country’s six refineries operated near the highest rates seen in more than six years. Oil use should keep rising as Pemex works to start commercial operations of the new Olmeca refinery, also known as Dos Bocas, with capacity to process 340,000 barrels of crude oil a day.
Pemex didn’t immediately return call and messages seeking comment.
The halt affects primarily exports of Maya while shipments of other grades including medium sour Isthmus should continue at reduced volumes, the people said. It’s unclear if Pemex’s trading arm PMI will be able to follow through on the export cut. In 2021 and later in 2023 the company had to shelve plans to halt oil exports after it failed to increase domestic fuelmaking.
US refiners are likely to bear the brunt of the cut in Maya exports. Fuelmakers including Valero Energy Corp, Chevron Corp and Marathon Petroleum Corp import 420,000 barrels of the heavy sour variety per day. In 2023, Maya exports reached 612,000 barrels a day.
©2024 Bloomberg L.P.
KEEPING THE ENERGY INDUSTRY CONNECTED
Subscribe to our newsletter and get the best of Energy Connects directly to your inbox each week.
By subscribing, you agree to the processing of your personal data by dmg events as described in the Privacy Policy.
More oil news
![Energy Connect Story Thumbnail](/images/default/oilandgasgeneric.jpg?anchor=center&mode=crop&width=240&height=135&format=webp)
Woodside Looks to Build ‘Dream Team of LNG’ at Acquired US Plant
![Eni](/media/zrnnqrv2/eni.jpg?anchor=center&mode=crop&width=240&height=135&rnd=132771144027800000&format=webp)
Eni signed exclusivity agreement with KKR for the potential sale of a minority stake in Enilive
![Woodside](/media/tq5juvf3/woodside.jpg?anchor=center&mode=crop&width=240&height=135&rnd=132834340121370000&format=webp)
Woodside's quarterly revenues exceed $3 billion backed by strategic milestones
![BloomburgMedia_SGUY72T0AFB400_22-07-2024_06-22-21_638572032000000000.jpg](/media/cfwjsnpi/bloomburgmedia_sguy72t0afb400_22-07-2024_06-22-21_638572032000000000.jpg?anchor=center&mode=crop&width=240&height=135&rnd=133661029417000000&format=webp)
Oil Rises as Biden Quits US Race, Blazes Threaten Canadian Wells
![BloomburgMedia_SGZSI8T1UM0W00_22-07-2024_07-32-52_638572032000000000.jpg](/media/yq5nxplm/bloomburgmedia_sgzsi8t1um0w00_22-07-2024_07-32-52_638572032000000000.jpg?anchor=center&mode=crop&width=240&height=135&rnd=133661071728370000&format=webp)
Kamala Harris Seen as Tougher Oil Industry Opponent Than Biden
![Oil And Gas Refinery Plant](/media/czhapv55/oil-and-gas-refinery-plant.jpg?anchor=center&mode=crop&width=240&height=135&rnd=132900920345270000&format=webp)
PetroChina joins Oil and Gas Decarbonisation Charter
![GALP](/media/1dpp15bu/galp.png?anchor=center&mode=crop&width=240&height=135&rnd=133661151184570000&format=webp)
Galp reports 16% rise in Q2 2024 net profit amid higher oil prices and lower production costs
![BloomburgMedia_SGXF3CT0AFB400_21-07-2024_06-00-10_638571168000000000.jpg](/media/pp5dhnc3/bloomburgmedia_sgxf3ct0afb400_21-07-2024_06-00-10_638571168000000000.jpg?anchor=center&mode=crop&width=240&height=135&rnd=133660152100830000&format=webp)
Nigeria’s Dangote Refinery Targets Output of 550,000 Barrels a Day
![BloomburgMedia_SGUD23DWLU6800_22-07-2024_07-49-38_638572032000000000.jpg](/media/ey5kep5x/bloomburgmedia_sgud23dwlu6800_22-07-2024_07-49-38_638572032000000000.jpg?anchor=center&mode=crop&width=240&height=135&rnd=133661081780600000&format=webp)
Oil Falls With Broader Commodity Weakness Amidst Listless Trade
![BloomburgMedia_SGVJS1T0G1KW00_19-07-2024_20-00-09_638569440000000000.jpg](/media/5yomaqhj/bloomburgmedia_sgvjs1t0g1kw00_19-07-2024_20-00-09_638569440000000000.jpg?anchor=center&mode=crop&width=240&height=135&rnd=133658928099030000&format=webp)
Occidental Planning to Sell Bonds in Up to Five Parts
![CSIS Thumbnail](/media/o0acqjyg/csis_thumbnail.jpg?anchor=center&mode=crop&width=540&height=300&rnd=133566075809700000&format=webp)
CSIS: long-term LNG demand to reshape global export capacity growth
![Dr Carole Nakhle Thumbnail](/media/gqrpjths/dr-carole-nakhle_thumbnail.png?anchor=center&mode=crop&width=540&height=300&rnd=133542056370600000&format=webp)
More women in energy vital to the industry’s success
![Vandana Hari Thumbnail](/media/gz3dyktl/vandana-hari-thumbnail.jpg?anchor=center&mode=crop&width=540&height=300&rnd=133511540022930000&format=webp)
India’s energy sector presents lucrative opportunities for global companies
![OIL INDIA Thumbnail (1)](/media/oddlww2x/oil-india-thumbnail-1.jpg?anchor=center&mode=crop&width=540&height=300&rnd=133506537128730000&format=webp)
Oil India charts the course to ambitious energy growth
![DNV Thumbnail](/media/chkphnjn/dnv-thumbnail.png?anchor=center&mode=crop&width=540&height=300&rnd=133491856590700000&format=webp)
Maritime sector is stepping up to the challenges of decarbonisation
Partner content
![Navigating the trading seas: exploring the significance of benchmarks-1859882229](/media/qlacaiww/navigating-the-trading-seas-exploring-the-significance-of-benchmarks-1859882229.jpg?anchor=center&mode=crop&width=540&height=300&rnd=133613577584600000&format=webp)
Navigating the trading seas: exploring the significance of benchmarks
![New Lng Ship Web 17829](/media/vjrjyypa/new-lng-ship-web-17829.jpg?anchor=center&mode=crop&width=540&height=300&rnd=133179936218300000&format=webp)
Back to the Future(s): the best commodities benchmarks are still physically settled
![Dr Klaus](/media/4eyh2dr0/dr-klaus.jpg?center=0.3953747239980292,0.50683017007953435&mode=crop&width=540&height=300&rnd=133517897092430000&format=webp)
Ebara Elliott Energy offers a range of products for a sustainable energy economy
![ESSAR](/media/5uafghtj/essar.jpg?anchor=center&mode=crop&width=540&height=300&rnd=133524466961070000&format=webp)
Essar outlines how its CBM contribution is bolstering for India’s energy landscape
![HNC 7611 V2](/media/0dqbya15/hnc_7611_v2.jpg?anchor=center&mode=crop&width=540&height=300&rnd=133517899616530000&format=webp)