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Mexico, which was one of the top-ten oil suppliers to India last year, has drastically cut its crude exports to the Asian consumer so far this year as state oil firm Pemex works to launch a large refinery to process fuel domestically, Reuters reported on Tuesday, quoting sources and industry data.
Pemex and Mexican President Andrés Manuel López Obrador aim to inaugurate the Dos Bocas oil refinery in the summer of this year, although analysts doubt the refinery would produce any gasoline by the end of 2022.
Nevertheless, as it prepares for more crude to run at its domestic refineries, Mexico’s Pemex is slashing exports to India, according to Reuters’ sources and estimates from industry data.
India is scheduled to receive just one cargo from Mexico in the first two months of 2022, meaning the world’s third-largest oil importer will have 15,000 barrels per day (bpd) of Mexican crude in January and February, compared to nearly 98,000 bpd it received in the same period last year, according to Reuters.
In recent years, India has been buying more Mexican oil, to replace lost heavy crude volumes from Venezuela after the U.S. sanctions on Nicolas Maduro’s regime. In 2021, Mexico was the sixth-biggest crude oil supplier to India.
Now that Pemex is preparing for the new refinery, it is reportedly cutting oil exports, not only to India but to all customers.
Mexico is also reportedly looking to suspend crude oil exports in 2023 in a bid to focus on domestic self-sufficiency. The move is part Lopez Obrador’s plan to increase local fuel production to reduce dependence on imported fuels.
Meanwhile, the construction of the Dos Bocas oil refinery is running $3.6 billion over budget. Delays could mean that the flagship project of López Obrador may not start operations this year—and maybe not even in time to achieve the state oil firm’s plan to end oil exports in 2023 and focus on refining fuel domestically. Mexico’s Energy Minister Rocio Nahle responded to reports of huge overruns, saying that the refinery was “being built in record time. Opinions around the world are very positive.”
By Charles Kennedy for Oilprice.com
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