Will 2021’s US-Mexico Energy Trade Record Last?

In 2021, the US-Mexico energy trade was valued at US$58 billion, including both the imports and exports from both countries to each other. In particular, the value of US exports of products like oil, refined fuel products, and natural gas peaked at an outstanding amount of US$42 billion. This marked the highest energy export level between these countries since 1996, according to a report by the US Energy Information Administration (EIA).

The high prices of oil products that characterized the year 2021 stem mainly from the energy market’s gradual recovery after the worst of the COVID-19 pandemic. According to the EIA, crude oil was the most prominent import making up to 82 percent of the total import and amounting to 583Mb/d, no small number considering the growing prices of crude oil across the globe. The value of this asset’s Mexican export to the US rose to US$13 billion in 2021.

Other petroleum products that experienced a boost of sorts, among which gasoline and fuel oil, were imported by Mexico from the US and amounted to 21 percent of the trades. The EIA emphasizes that the product’s exports to Mexico averaged 1.2MMb/d and that their value increased from US$19 billion in 2020 to US$31 billion in 2021.

The conditions created by the Russian invasion of Ukraine also granted Mexico the opportunity to expand its energy market. During 1Q22, Expansión reports, Mexico has maintained a trade surplus of about US$218 million, with an increase of 18.1 percent from Jan. to March 2022, which stood at US$1.32 billion. As for the sum of imports, Mexico accounts for a growth of 20.8 percent in comparison to the first quarter of 2021, with an impressive number of US$136,940 million. 

Since the US stopped importing oil products from Russia this April 22, Latin American countries like Mexico, Venezuela and Brazil have since increased their exports to the country. Forbes reveals that Mexico was responsible for 26 percent of US oil imports in March 2022, while state-owned company PEMEX also slightly increased its global imports of fuel oil, from 175.3Mb/d in February to 170.6Mb/d in March. However, this phenomenon is not limited to the Latin American region, since suppliers from countries in the Middle East region also expect to see oil exports rise from 5 to 17 percent during 2022.

Some industry analysts argue these figures will not be long-lived. Jonathan Ruiz Torre, Managing Director of Special Projects, El Financiero, wrote that the EIA had reported the last record-high peak of US imports from Mexico, since PEMEX would begin to focus on improving domestic natural gas production and refining at restored oil refineries. Nevertheless, Mexico’s energy supply remains significantly linked with that of its neighbor.