Mexican Oil Imports Hit by Weaker Peso

The recent depreciation of the Mexican peso following the presidential election has elevated the price of imports for oil and natural gas from the US.

• The peso has lost around 11% of its value against the greenback since the left-wing Morena party’s thumping electoral victory earlier in June, Argus said.
• Given Mexico is a net importer of dollar denominated energy since 2015, the depreciation in the peso will worsen its oil balance, even if it benefits other net exporting sectors.
• Refined product imports from the US still account for around 72% of Mexico’s domestic gasoline consumption, Argus said.
• Mexico’s crude exports are also falling as it redirects production to domestic refineries, such as the new 340k b/d Olmeca.
• Crude exports fell 31% on the year in April to 618k b/d, according to Argus
• Yet, Pemex’s flagship Olmeca (Dos Bocas) refinery in Mexico is unlikely to produce any commercially viable motor fuels before the end of the year, according to Reuters sources.