Mexico’s Pemex Looks for New Customers in Europe, China, and India Despite US Tariffs

Mexico is investigating Asian and European markets in order to identify new crude oil customers in response to Trump’s tariffs.

Pemex, the Mexican state oil company, is currently in discussions with potential customers in Asia, including China, and Europe in order to identify alternative markets for its crude in the wake of the tariffs imposed by US President Donald Trump, according to a senior Mexican government official.

This week, President Trump implemented tariffs of 25% on products from Canada and Mexico. Although Canadian crude oil was granted an exemption with a 10% levy, Mexican crude is expected to be subject to a complete 25% tax.

Last year, Pemex exported an average of 806,000 barrels per day (bpd) of petroleum, with 57% of that volume being directed to the United States.. Nevertheless, in January, exports experienced a 44% year-over-year decline to 532,404 bpd, its lowest level in decades.

The United States has historically been the primary recipient of Mexico’s flagship heavy sour Maya petroleum, despite the fact that the country already exports a small amount of crude to Europe and Asia, with a particular emphasis on India and South Korea, as per Kpler data.

Pemex had been in discussions with potential new purchasers outside the US, according to the government official, who spoke on the condition of anonymity due to the sensitivity of the discussions.

The official stated, “The positive aspect is that there is a demand for Mexican crude in Europe, India, and Asia.” “There is a demand for Pemex crude and heavy crude.”

They also stated that the initial discussions with potential Chinese purchasers had demonstrated a high level of interest. The official stated that the rerouting of these movements will be determined by demand.

Reuters was informed by two sources at PMI Comercio Internacional, Pemex’s trading branch, that China, India, South Korea, and even Japan could constitute viable markets for Pemex’s crude, despite the increased shipping costs.

One of the merchants stated, “The volume that was not sent to the US could only be taken by Asia,” referring to the refineries that are capable of processing the specific type of crude oil that Pemex produces.

A request for comment was not promptly responded to by Pemex and its trading arm.

Traders have been speculating for weeks as to whether Pemex, the world’s most indebted energy company, would provide discounts to its US clients in order to retain them in the face of the tariffs. Nevertheless, the government official prohibited such an action, asserting that shipments would likely be redirected to Asia and Europe once current contracts with US purchasers expire this month.
However, the source also observed that the termination of contracts between US purchasers had not yet been addressed.