Mexico’s crude exports to the US dropped to their lowest level in 25 years in September, as the Latin American nation seeks other buyers in response to reduced demand from US refiners, reports Bloomberg.
Mexico’s state-owned oil company Petroleos Mexicanos (Pemex) shipped 550,000 barrels of crude a day to the US in September, marking the first time since 1992 that less than half of its output has gone to the US.
With increasing unconventional output, producers in the US and Canada have begun to supply almost three quarters of US refinery demands, up from 50% five years ago.
Mexico and other importers have felt the squeeze and started seeking to exploit markets further abroad.
In September, Mexico sold large quantities to Spain (200,000 bpd), India (166,000 bpd) and China (33,000 bpd). While the exports to China are relatively small, they represent a doubling of the figures for the previous month.
“Pemex has a diversification strategy and exports to countries like Japan, China and India have increased as both a business decision and foreseeing that the US demand could decrease over time,” a Pemex spokesman told Bloomberg.
In August, the US government decided to allow the sale of domestic oil to Mexico for the first time, part of the Obama administration’s wider policy of breaking the self-imposed ban on exports of US oil, reported Reuters.
Under oil swap arrangements confirmed in October, Mexico is set to import light crude from the US in exchange for Mexico’s heavier crude oil, which is more suitable for US refineries.