Fuel Smuggling is More Profitable for Cartels Than Drugs or Human Trafficking: Value of $12 to $21 Billion A Year, According to Texas Officials

      I have written about this horrendous criminal enterprise a couple of times in the past. Apparently, it is still proliferating in different forms, and I think enforcement efforts should be stepped up. It is disheartening and enraging to know this is happening on a large scale in the U.S. To hell with the cartels!

     The news story, reported in the Houston Chronicle by Rachel Nostrant, notes that fuel smuggling has likely overtaken drug smuggling as the Mexican cartels’ most profitable endeavor, according to Texas Dept. of Public Safety officials as they addressed a state Senate committee.

"Fuel trafficking is a threat that is operating in plain sight," Col. Freeman Martin, the department's director, told the state Senate Select Committee on Homeland and Border Security. "They're loading fuel trucks …. or any container you can think of, and hauling it south."

“Fuel smuggling or trafficking, the illegal transfer or alteration of fuel across borders to avoid taxes and reap illicit profits, is a growing concern for Texas officials and the state's oil and gas industry.”

"This is just as complex, just as dangerous, just as high-revenue for the cartels as the drug trafficking and human trafficking has historically been," said Sen. Phil King, a Republican from Weatherford, a city outside of Fort Worth.”

     According to a Microsoft Copilot search, the annual revenue of a Permian Basin well is about $5 million before taxes. If we take the median of the $12-21 billion estimate of cartel fuel smuggling profit, or $16.5 billion, we can estimate that the annual profit is equivalent to the annual revenue of 3300 Permian wells! That sounds like quite a lot, but it checks out with a simple division of 5 million into 16.5 billion. In 2023, there were 5822 Permian wells drilled. Could one consider the cartels far more profitable than any single driller in the basin? It would seem so. Thus, there is quite a lot of criminal activity going on that needs to be addressed. We should all be outraged. Perhaps local, state, and federal governments should do more to address this issue since it does not seem to have improved much over the last few years. Some of the oil and oil products are simply stolen. It is also blended to make it more profitable and likely cheats the buyers and could damage equipment. Thus, we see lower-quality fuel sold at much higher prices, basically a scam. Theft of oil products and oilfield equipment is also a huge related issue where the cartels are heavily involved.

     Below, the article explains what has been happening. Basically, the task force addressed oil theft last year with new measures and now wants to address oil trafficking, which includes blending and transferring.

“The state created a multi-agency task force to tackle oilfield theft last year and Department of Public Safety officials told state lawmakers it is time for fuel trafficking to receive similar scrutiny.”

“Cartels sometimes drive empty trucks into the U.S. and fill them up with legally purchased and tax-free fuel from licensed terminals, said Martin. The trucks are then driven off their approved routes to unregulated fuel sites. Cheaper products are blended into the fuel, customs documents are forged or altered, and the fuel is brought into Mexico, which has an underdeveloped refining industry,  he said.”

“Those fuel products, including diesel, are often sold at two-to-three times their cost in the United States.”

“Making it illegal for trucks carrying hazardous materials to deviate from pre-planned routes, or to carry more than 80,000 pounds, could potentially disrupt cartel fuel smuggling operations, state and industry officials have said.”

“The department is focused on identifying high-level cartel operations and exploring how to establish inspections for suspected illicit fuel operations, said Maj. Tim Murphy, head of public safety for Texas DPS.”

"This is organized crime," said Murphy. "We had the same thing we dealt with in the oilfield when they steal oil – It isn't the guy stealing the oil that we want to get to, it's the guy that's puppeting that person."

  

  

References:

 

Smuggled Texas fuel is bankrolling cartels, state officials say. Rachel Nostrant. The Houston Chronicle. August 20, 2026. Smuggled Texas fuel is bankrolling cartels, state officials say