Mexico’s state-owned company, Pemex, is seeking new buyers for its crude oil in Asia and Europe after the imposition of US tariffs on Mexican imports.

The tariffs, announced by US President Donald Trump, include a 25% levy on Mexican crude, prompting Pemex to explore alternative markets outside the US, reported Reuters, citing sources.

In 2024, Pemex exported 806,000 barrels per day (bpd) of crude, with 57% destined for the US.

However, exports dropped significantly in January, reaching a low of 532,404bpd.

Pemex is now in discussions with potential buyers in non-US markets, including China, India and South Korea, to redirect its crude oil exports.

A senior Mexican Government official highlighted the demand for heavy crude, which Pemex produces, and mentioned that Chinese buyers have shown considerable interest, the report said.

Sources from PMI Comercio Internacional, Pemex’s trading arm, confirmed that Asian buyers including China, India, South Korea and Japan could be suitable markets for Pemex’s crude despite increased shipping costs, the report said.

One trader emphasised that only Asia could accommodate the volume not sent to the US due to the specific refinery requirements.

Speculation has arisen regarding potential discounts for US clients, but the government official dismissed this possibility.

Once current contracts with the US clients expire, Pemex is likely to redirect shipments to Asia and Europe.

The trading arm sources also confirmed there are no plans to offer discounts to boost competitiveness.

Mexico’s oil production, primarily from older fields in the Gulf of Mexico, has declined to a four-decade low.

The delayed start of the new 340,000bpd Olmeca refinery in Dos Bocas has led to the continued export of crude, while importing gasoline and diesel, mainly from the US, continues.

In its most recent report, Pemex reported a $9bn loss in the fourth quarter of 2024, a stark contrast to the previous year’s profit.

The loss was driven by rising sales costs, lower fixed asset values and currency exchange losses, underscoring the company’s tough financial situation.

During the quarter, production continued to decrease, with crude and condensate output dropping to 1.65 million barrels per day, reflecting a nearly 10% year-on-year decline.

Without increased investment in exploration and production, Mexico may face the prospect of importing crude in the future to support its refinery capacity.

“Pemex explores Asian and European markets for crude oil following US tariffs” was originally created and published by Offshore Technology, a GlobalData owned brand.