EXIM Cancels US$800M Credit to PEMEX Over Oil Exports to Cuba

The Export-Import Bank of the United States (EXIM) canceled an approximately US$800 million credit line to PEMEX in August due to free oil exports to Cuba, a country under a commercial embargo by the US, as reported by a financial source in Washington.

EXIM, the official credit agency to promote US private sector exports and investment abroad, had already completed the approval process for the NOC. However, the credit line was canceled after the donation of over 1MMb of oil to Cuba in June and July was revealed, which Mexico had not previously disclosed, presumably to avoid sanctions. 

While PEMEX did not export oil to Cuba in August, according to the data, the two previous shipments would have fetched a substantial price in the open market. The July donation was valued at US$54 million, while the June shipment could have reached US$23 million, based on the average price of Mexican crude oil during those months.

This action places the state-owned company in a situation similar to that of countries on EXIM's blacklist, known as the Country Limitation Program, which includes nations like Bolivia, Cuba, Haiti, Nicaragua and Venezuela, among others. EXIM reports that, as agreed by both parties, PEMEX withdrew its credit request on August 23, 2023, without providing an explanation.

A month after the credit suspension, Minister of Foreign Affairs Alicia Bárcena Ibarra tried to manage the situation by sending a conciliatory message to Washington. She stated that PEMEX was exploring ways to charge Cuba for the donated oil as humanitarian aid but emphasized that any such action should avoid violating US sanctions.

President Andrés Manuel López Obrador has repeatedly called on the US to lift its trade embargo, first imposed six decades ago after Fidel Castro came to power in Cuba. Bárcena reiterated the call in her speech at the UN, describing it as "completely unjustified, contrary to international law and unrelated to the values and peaceful coexistence prevailing among the peoples of Latin America and the Caribbean."

Currently, the US and Mexico are in talks regarding alleged violations in energy matters under the trade agreement between both countries, which could escalate to a conciliation panel due to measures taken by the López Obrador administration to strengthen PEMEX and CFE.