Favorable Energy Trade Continues with Mexico

Oil Barrels

A recent report released by the U.S. Energy Information Administration (EIA) shows that the value of energy exports to Mexico has exceeded U.S. imports for three straight years. The two countries' energy trade relationship had historically been driven by Mexico’s sales of crude oil to the U.S. and by U.S. exports of refined petroleum products to Mexico. 

However, this imbalance has shifted with less reliance on imported Mexican oil. Beginning in 2015, the value of U.S. energy exports to Mexico, which included more petroleum products and natural gas, began to increase, reaching a high of $25.8 billion in 2017. This value is in comparison to the $11.1 billion of energy imports, impacted most prominently by a decreasing amount of imported oil. 

The U.S. imports an average of 608,000 barrels of oil per day from Mexico, representing eight percent of total U.S. oil imports. However, due to price fluctuations and an increase in domestic oil access, the annual value of Mexican crude oil has dropped from $30 billion in 2015 to $9.8 billion in 2017. In response, Mexico has been sending more oil to Europe and Asia.

Petroleum products including gasoline, fuel oil, and propane account for most of the U.S. energy exports going to Mexico. In 2017, more than one million b/d of U.S. petroleum products made their way across the southern border, up from 880,000 b/d in 2016. This amount represented 24 percent of all petroleum products exported from the United States. These exports were valued at more than $23 billion dollars in 2017. Domestic gasoline exports now make up more than half of Mexico’s gasoline consumption. 

Finally, natural gas exports to Mexico from the United States — either by pipeline or liquefied natural gas (LNG) cargo — comprised 4.6 billion cubic feet per day in 2017. The natural gas trade is dominated by pipeline distribution to Mexico, which constituted nearly half of total U.S. natural gas exports last year. 

The growing number of natural gas pipeline shipments to Mexico are driving the United States’ emerging status as a net natural gas exporter  — a trend that could continue. Natural gas pipelines currently under construction or in the planning stages are expected to nearly double capacity, as much of this natural gas will likely be used to generate electricity throughout Mexico.

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