Major North American oil producer to end crude exports — RT Business News

Mexico will droop crude oil exports in two years in a bid to concentrate on home self-sufficiency, varied media have reported.

The transfer is a part of President Andres Manuel Lopez Obrador’s plan to extend native gas manufacturing to scale back dependence on imported fuels.

The export phase-out announcement was made by the chief government of Pemex, Octavio Romero, who additionally stated that Mexico would scale back oil exports from subsequent 12 months by greater than 50%, to 435,000 barrels per day (bpd).

At present, Mexico is the third-largest oil exporter within the Americas, after the USA and Canada, in response to information from the US Power Data Administration.

The primary locations for its crude are its northern neighbors in North America and China, India, and South Korea, in addition to European international locations. A reduce in exports might make a few of these importers search for different suppliers.

Gas demand in Mexico has risen throughout the pandemic however native oil manufacturing has did not observe. Refining capability can be an issue, though President Lopez Obrador’s plans embody the development of a brand new refinery with a capability of 340,000 bpd. The refinery has a price ticket of $12.4 billion, in response to calculations from earlier this 12 months, as reported by Argus.

If Mexico certainly stops exporting crude oil, this can hit US Gulf Coast refiners onerous as it can reduce off one more supply of heavy oil, for which their refineries have been configured. One other main supply of heavy crude was Venezuela, however US sanctions towards Caracas ended the movement of heavy Venezuelan crude to the Gulf Coast.

In accordance with the Bloomberg report, there are additionally doubts about Pemex’s personal capability of refining all of its crude oil output. An extended interval of underinvestment in refinery upkeep has lowered working capability considerably, and it’s questionable whether or not the state power large would have the ability to flip issues round in simply two years.

Pemex is at the moment probably the most indebted oil firm on the planet regardless of main efforts by the Lopez Obrador authorities to assist it via tax breaks and different debt-relief measures.

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