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OPEC+ and Mexico: Supply cut or refining goals?

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23 April 2020

OPEC+ and Mexico: Supply cut or refining goals?

Report summary

Mexico convinced the OPEC+ group to lower their total supply reduction target from 10 to 9.7 million b/d. Mexico refused to accept a higher cut, arguing that it was impossible for the country to comply with other government targets if they did. A new clue has emerged to explain Mexico's resistance. A week following the OPEC+ meeting, the Mexican President announced an increase in domestic refining -- long-planned, but only achievable in the midst of widespread cuts in global refinery utilization. This report explores the role of four elements that help explain Mexico's position during the OPEC+ negotiations: • The president's approach towards OPEC • Production goals for 2020 • Mexican government and Pemex hedging programs for 2020 • The push to increase domestic refinery utilization

Table of contents

  • Keep OPEC+ relationship but do better
  • The production struggle or playing the numbers
  • Mexico’s hedging program: covered but not shielded
  • Another doubling down: run refinery run

Tables and charts

This report includes 3 images and tables including:

  • Mexican oil production forecast
  • Mexico's hedging volume and cost
  • Mexican crude exports forecast

What's included

This report contains:

  • Document

    OPEC+ and Mexico: Supply cut or refining goals?

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