Mexico Plans to Cut Crude Exports to Ramp Up Domestic Products Output

Pemex is planning to supply less crude over the next few months, after it cancelled supply contracts from its Maya crude oil to refiners in the US, Europe and Asia, in an attempt to boost domestic gasoline and diesel output ahead of the presidential election on 2 June, sources told Bloomberg.

• Shipments of other grades such as Isthmus should continue at reduced volumes, the sources said.
• Last year, Mexico exported 612kbpd of its Maya crude grade with most of the exports to the US, followed by Spain, India and South Korea.
• The reduction in exports could especially tighten physical supplies of heavier, sour grades – such as Maya – with the potential halt to Venezuelan exports from end April.
• The prospect of lower supplies from Mexico is supporting prices of medium sour Mars Blend produced in the Gulf of Mexico. Mars traded at a premium of $1.60/bbl above futures Monday, according to preliminary data from pricing agency General Index. That would be the strongest since November.