MEXICAN state company Pemex is in talks with potential buyers in Asia, including China, and Europe, as it seeks alternative markets for its crude after U.S. President Donald Trump imposed tariffs on imports, a senior Mexican government official said, Reuters reported today.
Trump, this week, implemented 25% tariffs on goods from Mexico and Canada. While Canadian crude won an exception of a 10% levy, Mexican crude is to be taxed at 25%.
Last year, Pemex exported 806,000 barrels per day (bpd) of crude, of which 57% went to the United States. In January, exports slumped 44% year-on-year to 532,404 bpd, the lowest level in decades.
While Mexico does send some crude to Europe and Asia - in particular to India and South Korea, according to Kpler data - its northern neighbor receives the lion's share of exports of the flagship heavy sour Maya.
The government official said Pemex had been talking to potential new buyers in non-U.S. markets, speaking on the condition of anonymity because the talks are commercially sensitive.
"The good thing is that there's appetite for Mexican crude in Europe, in India, in Asia," they said. "There's demand for heavy crude and Pemex crude."
The official said potential Chinese buyers were "very interested" in initial conversations, adding that "demand will decide how these flows are redirected."
Two sources at PMI Comercio Internacional, Pemex's trading arm, confirmed to Reuters that China, India, South Korea and even Japan would be suitable markets for what Pemex produces in the face of tariffs, despite higher shipping costs.
One of those traders said that "only Asia" could take the volume that was not sent to the U.S., given the type of refineries operating there since they must be capable of processing the specific type of crude oil.
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Neither Pemex nor its trading arm immediately responded to a request for comment.
No Discounts
Traders have for weeks speculated on whether the world's most indebted energy company would give a discount to its U.S. clients as it seeks to retain them in the face of tariffs.
The government official, however, categorically ruled out such a concession and said that once the current contracts with U.S. clients expire this month, vessels would likely head to Asia and Europe. Buyers in the U.S. have not discussed terminating contracts, the source added.
The two sources at the trading arm also confirmed that there were no plans to apply discounts to make its exports more competitive.
Mexico is a major producer but output from the country's older oil fields, mostly in the Gulf of Mexico, has slumped to more than a four-decade low.
Its ailing domestic refining system and a long-delayed start of the new 340,000 bpd Olmeca refinery in the port of Dos Bocas has left the country exporting crude oil while having to import gasoline and diesel, much of it from the U.S.
Without significant spending on exploration and production, Mexico may even find itself importing crude in the future to feed its expanded refinery capacity in the next decade, a once unfathomable reversal. – March 6, 2025
