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North American oil nations have suddenly stopped exporting crude oil

via:财联社     time:2021/12/29 15:02:24     readed:79

A news conference in Mexico on Tuesday was another reminder of the astonishing unpredictability of the oil market.

Pemex CEO Octavio Romero announced in Mexico City that the country will completely stop exporting crude oil to the international market in 2023 and halve exports to 435,000 barrels per day (BPD) during a transition period in 2022.

重要玩家即将下线 墨西哥将停止原油出口以满足“能源自主”目标
(Source: Video screenshot)

The change also reflects the government of Mexico's President, Leopoldo Lopez; Lopez Obrador (simply known as AMLO) & LDquo; Energy independence & RDquo; Determination. Like most major oil producers, Mexico lacks adequate refining facilities to convert crude oil into fuel oil and other chemicals, so it imports most of its gasoline and diesel from U.S. refineries.

If AMLO's plan goes through, it could mean the exit of a significant seller in the international oil market by 2023.

In the early 2000s, Pemex exported 1.9 million barrels a day to refineries in the U.S., India, Japan and elsewhere, and in recent years exports have stayed above 1 million barrels a day. Mexico, also an Opec observer, was in the global spotlight during negotiations last year on a historic deal to cut output.

Mexico's export freeze has also had a big impact on refineries in the GULF of Mexico, many of which are equipped to process heavy, sour crude.

How to land remains a question

While the market does not quite understand the logic of increasing domestic refining capacity and halting exports, the immediate problem for Mexico's highly indebted oil companies is how to make up the trade cash flow. The Mexican state-owned company is saddled with $113bn of debt, the most of any crude oil exporter in the world.

In addition to the bond payments, there are questions about how to ramp up refining capacity over the next year or so to fully absorb the crude produced domestically. Pemex's refining facilities have not run at half capacity in the past five years because of easier delivery to the U.S. refinery next door, and the problems of underinvestment and lack of maintenance are unlikely to be solved anytime soon.

For comparison, US refineries are typically operating at more than 90 per cent of capacity, and even during the worst of the pandemic, utilisation was close to 70 per cent. Rosanety Barrios, a former official in Mexico's energy ministry, said in an interview that the country's refineries struggled to run at 80 percent of their rated capacity and would not have a cushion provided by foreign partners in case the plan falters after publicly calling for an export halt.

To meet its domestic energy targets, Pemex will reach 1.51 million b/d of refining capacity by 2022 and 2 million b/d by 2023, Romero said on Tuesday.

The country's current refinery in the DOS Bocas region is under construction and is scheduled to start production in 2022, but will not reach full capacity by 2023 due to cost overruns and construction delays. A Mexican state firm also bought a facility near Houston that is still considered American, though it is on American soil. Mexican National Refining System & RDquo; Part of.

By one estimate, if Mexico were to increase its refining capacity by 635,000 to 735,000 barrels a day, it would be able to produce 190,000 to 220,000 barrels of gasoline, enough to reduce U.S. refined oil imports by 50% from 2020 levels. According to the EIA, more than 60 percent of gasoline exported by REFINERIES in the U.S. Gulf of Mexico in 2020 went to Mexico.

As well as us refineries, refiners in Asia, which consumes a quarter of Mexico's exports, will also be affected by the latest move. South Korea and India will be hit hardest.

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