Ice, Ice… Blackouts: The polar vortex impacts on Mexico's energy markets

The polar vortex is causing deep struggles, freezing off production and pushing a critical demand uptick to keep the affected population warm. Gas prices quickly surged to new highs, while also generating an undersupply situation. Mexico’s largest gas supply comes from US piped exports. Without the needed storage infrastructure, gas scarcity has quickly escalated – since 12 February, Genscape tracks US-to-Mexico pipeline exports to average 4.7 bcfd, representing a drop of 1.1 bcfd from the prior-30-day average. The consequences of gas shortages were immediately felt in the power sector, resulting in electricity outages affecting more than 4.7 CFE’s final users and rolling blackouts since 15 February. This insight analyses what is currently happening and what to expect during and after the cold storm passes.