Mexico will have zero oil exports by 2023, according to a report released by the Asia Pacific Economic Cooperation (APEC) forum.
By way of background, the decline in Mexico’s crude oil production was mainly due to the depletion of the supergiant Cantarell Field, Petróleos Mexicanos‘ (Pemex) largest asset, aggravated by underinvestment in exploration activities.
At its peak in 2004, Cantarell was producing 2.1 million barrels per day, accounting for more than 60% of Mexico’s total crude production at the time.
But in 2019, Cantarell produced less than 0.16 million barrels per day, accounting for only 9.3% of Mexico’s production.
As a result, Mexico’s crude exports fell 17%, to 1.1 million barrels per day between 2010 and 2020.
The drop in exports is now expected to accelerate, as Mexico aims to reduce oil exports to zero by 2023 and increase the domestic crude processing capacity of its refining system.
Oil exports
Mexico is a major producer and consumer of crude oil with abundant hydrocarbon resources.
Geographically advantageous, Mexico is located in North America and is bordered by the United States to the north, Belize and Guatemala to the south, and the Atlantic and Pacific oceans to the east and west, respectively.
Historically, Mexico has had an important and evolving energy trade relationship with the United States.
Mexico’s crude oil exports account for about 10% of oil imports to the United States.
In addition, Mexico imports large volumes of petroleum products and natural gas through pipelines from the United States, whose prices are the most competitive in the world.
Energy production, especially crude oil, has historically been an important component of the Mexican economy.
Following economic diversification and declining production, crude oil accounted for 5.3% of Mexico’s total export value in 2019, down from 37% in 1990.
Despite this downward trend, Mexico still relied on crude oil revenue for 10% of its government budget in 2019.
However, this was low compared to the over 30% share in 2004-2014.
Mexico has a population of 127 million people. It is the largest Spanish-speaking economy in the world, the eleventh most populous economy in the world and the sixth most populous economy in the APEC region.
