Mexico is Refining More Oil, but Exporting Less, and Expects No Increase for Cuba

    Natalia Katona, writing for Oil Price U.S., provides some pertinent information about Mexican refinery capacity utilization, growth, and strategy. The country is enhancing its energy security, decreasing its level of dependence on imports from the U.S., and increasing capacity utilization, resulting in more output of refined products like gasoline and diesel.   

     Since 2020, Mexican oil exports have dropped nearly 40% from 1.1 million barrels per day to 665,000 barrels per day. For the month of December 2025, they were down closer to 500,000 bpd. Mexican crude oil production has only declined by 100,000 bpd over the same time period. The decrease in exports is mainly due to the rise in refining capacity utilization, which is a success for the country and indicates that the long-awaited revival in refining is beginning to show up in the numbers. However, the success has not come without continuing challenges, including high costs for repairing aging refineries and fuel subsidization.

     Katona writes:

“The pivot traces back to 2019, when former president Andrés Manuel López Obrador launched a project to reset Mexico’s National Refining Systema (Sistema Nacional de Refinación, SNR). After decades of underinvestment and chronic underutilization, the strategy aimed to rehabilitate six aging refineries, restore idle units and integrate the new Dos Bocas (Olmeca) refinery into the domestic fuel system. The objectives were explicit: lift utilization rates materially and reduce Mexico’s structural dependence on imported gasoline and diesel.”  

     Capacity utilization has risen to a 10-year high in 2025 of 1.14 million bpd of 1.98 million bpd total capacity, or about 58% of capacity utilized. In 2024, few refineries achieved 50% capacity utilization.

“Between November 2024 and November 2025, diesel production in the country jumped from 162,000 b/d to 280,700 b/d, a 42% year-on-year increase, while gasoline output rose from 307,000 b/d to 412,600 b/d, up 26%. Trade flows confirm the downstream shift. According to Kpler, average US diesel exports to Mexico fell from 187,000 b/d in 2023 to 118,000 b/d in 2025, a 37% reduction, while gasoline imports declined from 338,000 b/d to 309,000 b/d over the same period. These figures include supplies from PEMEX’s Deer Park refinery in Texas, which averaged about 30,000 b/d to Mexico in 2025, meaning the decline in third-party imports is even more pronounced.”

     As noted, the challenges for the Mexican refining sector revitalization include the high costs of subsidization to control gasoline and diesel prices, which is estimated at US$46.3 billion annually. Another challenge is energy security for refining operations. Several important refineries, including the productive Tula refinery, are vulnerable to shutdowns due to power outages. Unstable power and hydrogen availability remain challenges that continue to slow output. She notes that the two biggest drivers will be:

 “… the new Dos Bocas refinery, which is already delivering the largest gains in domestic production, and the Tula refinery, where long-delayed modernization could unlock the system’s next step-change.”

     Expected changes ahead include a naphtha hydrodesulfurization unit critical for low-sulfur gasoline also which should be completed early in 2026, and finally finishing a petroleum coking plant that is a decade behind schedule.

     Mexico is also a supplier of crude oil to Cuba. From January 2025 to September 2025, those exports amounted to 19,200 barrels per day: 17,200 barrels of crude oil and 2,000 barrels of refined products. Cuba has been under a trade embargo since 1959. It had been receiving oil from Venezuela, some thought to be in exchange for Cuban security personnel and apparatus to support the Maduro regime, something the U.S. would like to dismantle. Venezuelan exports to Cuba amounted to about 35,000 bpd for the past three months, about 25% of Cuba’s total demand. Mexican President Claudia Sheinbaum recently noted that Mexico was not planning to increase its exports to Cuba. It considers its exports to Cuba to be humanitarian in nature, to offset hardship from the embargo. Others are not expecting Mexico to export more oil to Cuba. Besides needing it domestically, there may be pressure from the U.S. not to come to Cuba’s aid as Mexico has in the past to counter power outages and social unrest. With uncertainty in crude oil supplies, there is a greater likelihood of power outages as many plants run on fuel oil. As noted in the IEA graph below, oil powers 83% of Cuba's grid.

References:

 

Mexico's crude exports slide as refining finally reawakens. Natalia Katona. Oil Price U.S. January 6, 2026. Mexico's crude exports slide as refining finally reawakens

Mexico becomes crucial fuel supplier to Cuba but pledges no extra shipments after Maduro toppled. Maria Verza. Associated Press. January 7, 2026. Mexico becomes crucial fuel supplier to Cuba but pledges no extra shipments after Maduro toppled

Cuba. Electricity. International Energy Agency. Cuba - Countries & Regions - IEA