Low Investment Poses Bigger Risk to PEMEX Than Tariffs: Moody’s

PEMEX faces greater risk from limited investment in oil production than from potential tariffs imposed by the United States, according to a report by Moody’s Investors Service. The ratings agency emphasized that the NOC’s long-term financial outlook is more vulnerable to internal policy decisions than to trade measures under a second administration of US President Donald Trump.

Moody’s, which rates PEMEX at B3 with a negative outlook, noted that low investment levels projected by the Mexican government could further constrain the company’s operational capacity. PEMEX currently produces about 1.6MMb/d of crude oil and condensates, a figure pressured by aging oil fields and outstanding debts to contractors.

The government’s refining strategy centers on boosting fuel production at the Dos Bocas refinery, which may lower Mexico’s need to export crude to the United States. However, this also reduces the volume of crude available for sale abroad, restricting PEMEX’s access to dollar-denominated revenue.

Moody’s further warned that PEMEX is in urgent need of capital. The company’s financial debt stands at MX$1.97 trillion (US$97.6 billion), the highest of any oil company globally. More than US$20 billion of that debt matures between 2025 and 2026.

Víctor Rodríguez, PEMEX CEO, is seeking alternatives to borrowing on international markets. The Mexican government is considering renewing joint ventures with private companies to fund upstream activities. However, investor interest may be limited due to Mexico’s less favorable regulatory environment, especially when compared to more competitive jurisdictions such as Guyana, Brazil and the United States.

During the administration of former President Andrés Manuel López Obrador, PEMEX’s credit rating was downgraded to speculative grade by both Moody’s and Fitch Ratings. The company ended its relationship with Fitch, calling the move part of a broader strategy to adapt to prevailing economic conditions.

In terms of trade, Mexico has largely avoided retaliatory tariffs despite ongoing US restrictions. Moody’s said Mexican crude exports face fewer risks than Canadian crude, noting that Canada’s Western Canadian Select is more reliant on US buyers. Mexico’s coastal access allows PEMEX to redirect exports more easily if needed.

PEMEX exports about 450Mb/d to the United States, with between 80-100Mb/d delivered to its Deer Park refinery in Texas, according to energy analyst Ramsés Pech of Caraiva y Asociados. To retain this market, PEMEX may have to offer deeper discounts.

Moody’s also pointed out that Mexico imports roughly 60% of its gasoline and 50% of its diesel. If retaliatory tariffs were to be imposed by either side, PEMEX would likely pass on the added costs to consumers.