Mexico's state-owned oil company Pemex can sidestep the US' 25pc tariff on Mexican imports by redirecting crude to other international buyers, particularly in Asia, market sources say.
Pemex primarily sells crude under evergreen or long-term contracts, allowing it to set prices and volumes buyers must accept, one former executive at Pemex's trading arm PMI told Argus. These agreements vary in duration, with some being indefinite and others requiring a minimum purchase period.
The 25pc tariff imposed by US president Donald Trump's administration could simply be added to Pemex's benchmark price and leave US buyers to decide whether to accept it. If they decline, Pemex could offer its crude at a discount to other buyers. "Pemex would rather sell at a discount elsewhere than absorb most or all of the tariff to keep exporting to the US," the former PMI executive said.
Pemex has more flexibility than Canadian heavy crude producers, whose output is primarily transported through pipeline to US refiners in the midcontinent. Pemex can more easily divert shipments to Europe or Asia rather than Texas, where most of its crude is consumed.
Pemex exported about 806,200 b/d of crude in 2024, a 22pc drop from 2023, according to company data. The US took around 505,000 b/d, or 60pc, of Mexico's crude exports in 2024, vessel tracking data show. Pemex is a key supplier of heavy crude and high-sulphur fuel oil (HSFO) to US Gulf coast refiners, which are also optimized to convert HSFO — a low-value byproduct — into higher-value fuels like gasoline and diesel.
The state-owned company exported around 130,000 b/d of HSFO to the US in 2024, down from 163,000 b/d in 2023, according to Vortexa. Pemex typically sells fuel oil at a discount relative to its high-sulphur Mayan crude to Texas refiners. Domestically, Pemex supplies HSFO to state-owned utility CFE, which uses it for power generation.
Pemex owns the 312,500 b/d Deer Park refinery in Texas, which processes Maya crude, but does not disclose how much crude it supplies to the facility. Pemex exported around 67,000 b/d of crude to the Deer Park refinery in 2024, according to Vortexa data.
In the medium term, Pemex could lower shipping costs to Asia by upgrading infrastructure at its Salina Cruz port on Mexico's Pacific coast, the former PMI executive said. "It wouldn't require a large investment, just improved pipeline capacity to move crude from the Gulf to the Pacific," he said.
