Cuba Oil Aid Under Scrutiny: The Week in O&G

PEMEX has reportedly halted or reviewed planned crude oil shipments to Cuba, a move that underscores mounting geopolitical pressures and realigns Mexico’s energy diplomacy amid heightened tensions with the United States. The development comes against a backdrop of shifting regional oil flows, changes in Venezuela’s government and oil output, and sensitive negotiations over USMCA.

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Mexico Reconsiders Cuba Oil Aid Amid Geopolitical Shifts

Mexico has provided crude and refined products to Cuba through its subsidiary Gasoline for Well-Being, a PEMEX-controlled entity established to manage energy cooperation with the Caribbean nation. Although President Claudia Sheinbaum has publicly defended these shipments as part of “historic cooperation” and humanitarian aid, recent reports indicate that Mexico has reconsidered or suspended at least one planned export in January 2026 amid concerns over possible retaliation from the US government under President Donald Trump.

PEMEX Hydraulic Fracturing Investment in Chicontepec

PEMEX is planning a significant ramp-up of investment in hydraulic fracturing activities at the Aceite Terciario del Golfo project in the Chicontepec Basin, according to El Universal reports, setting the stage for one of the most consequential policy shifts in years for the nation’s upstream sector. According to transparency data obtained from the Ministry of Finance, PEMEX intends to boost its fracking-related investment for 2026 by 66%, allocating approximately MX$4 billion to the project, up from MX$2.4 billion in 2025. This increase comes despite historical questions about the project’s profitability and longtime debate over fracking in Mexico’s energy policy landscape.

PEMEX Production Hits Decades Low

PEMEX ended 2025 with total oil production (crude plus condensates) of 1.635MMb/d, marking a 7% decline year on year and the lowest level reported in 46 years. The data, published by the NOC, underscores deepening challenges for Mexico’s oil sector as it struggles to reverse long-term declines in output amid operational and financial constraints.

PEMEX’s Strategic Plan 2025–2035 sets a goal of reaching 1.8MMb/d in total liquids production, and the company has set a 2026 target of 1.794MMb/d, nearly 160Mb/d above the 2025 average. Achieving this will require reversing persistent declines and accelerating output additions that have eluded PEMEX for years.

PEMEX Pushes Emissions Reduction Agenda Amid Industry Challenges

PEMEX reported a strategy to reduce greenhouse gas emissions and improve energy efficiency, part of broader efforts to align the NOC  with Mexico’s climate commitments and the international energy transition. The plan, outlined in a press release issued by the company on Jan. 21, 2026, aims for a cumulative reduction in energy consumption of nearly 6.1% by 2030 and cuts in emissions of up to 1.8MMt CO₂e annually. These reductions, PEMEX says, would be equivalent to the annual carbon sequestration of roughly 80 million trees or removing more than 500,000 vehicles from circulation.

PEMEX Seeks Liquidity, Mixed Contracts Under Financial Pressure

PEMEX is allegedly looking to secure liquidity in the face of financial pressures and underwhelming results from its mixed-contract strategy. The company’s efforts reflect broader challenges facing Mexico’s energy sector, where debt burdens, environmental concerns including flaring and methane emissions, and operational constraints have complicated both strategic planning and execution.

Mexico’s CNE Removes Price Cap on Gas LP

CNE has eliminated the methodology that established price caps on liquefied petroleum gas (LPG) for certain segments of the market, marking an important change in how the fuel’s prices are regulated. The elimination of the price cap methodology follows legal pressure from industry participants and alters the framework that had been in place for nearly four years.