Mexico cuts fuel imports to 16-year low, creating problems for US refineries

Mexico is demonstrating a rapid revival of its own oil refining sector, which has led to the lowest fuel purchases abroad since 2010. This policy of the state-owned company Petroleos Mexicanos (Pemex) has become a serious challenge for the US oil refining industry, which is losing its largest buyer amid a record accumulation of gasoline and diesel reserves. This is reported by Bloomberg, writes UNN.

Details

The main driver of Mexico's fuel independence was the gigantic Dos Bocas (Olmeca) refinery, which reached a record 77.5% of its capacity in December. In addition to launching a new plant, Pemex activated a new coking unit at the Tula refinery, which allows processing fuel oil sludge into high-value motor fuel. Thanks to these measures, Mexican plants are operating at their highest rates in the last decade.

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The reduction in imports has hit American energy giants such as Valero Energy Corp., Marathon Petroleum Corp., and Exxon Mobil Corp. For them, the situation is complicated by the fact that US gasoline inventories are currently the highest since the pandemic, and diesel inventories are at a two-year high, putting pressure on global prices.

Overload risks and future plans

Despite the successes, experts question Mexico's ability to maintain such high production rates for a long time. The equipment of Mexican refineries is prone to breakdowns during intensive operation, which has already been confirmed by recent fires at the Dos Bocas and Salina Cruz plants.

However, Pemex plans to maintain an intensified operating mode until at least April to meet domestic demand during the peak period of automobile transportation. If Mexican energy companies manage to avoid large-scale accidents, the country's dependence on American fuel may disappear completely, forcing US refineries to look for new markets in conditions of oversupply. 

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