A Pemex gas station in Mexico, circa March 2026. Mexico’s state-owned oil company, Pemex, sits at the center of the country’s efforts to revive declining oil production, attract private investment, and restore its role as a major energy producer. (Shutterstock/Arlette Lopez)

While the World Wants Oil, Mexico Stays on the Sidelines

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Mexico once ranked among the world’s leading oil producers. Can President Claudia Sheinbaum reverse decades of decline?

With events in the Persian Gulf putting energy security back at the top of the international agenda, Latin America is having a moment, as Argentina, Brazil, Guyana, and even Venezuela are all ramping up oil production. But missing from this list is Mexico, despite its long history as one of the world’s major oil provinces. As recently as 2004, Mexico was among the top global oil producers. But since then, the sector has been in decline from which it has yet to recover. 

Seeking to reverse this trend, in 2013, then-President Enrique Peña Nieto ended longstanding policies that had left exploration and production entirely in the hands of state oil enterprise Pemex. This liberalization was abruptly halted by his successor, Andrés Manuel López Obrador, a leftist populist and nationalist, despite the fact that new private investment had not had enough time to offset the depletion of existing fields. 

His handpicked successor, Claudia Sheinbaum, is now grappling with the consequences of decades of mismanagement of the sector. She has sought to fix Pemex’s finances and entice private capital back in to assure sufficient production for domestic needs, but seems content to let other countries go after global markets.

An Attempt to Revive Mexico’s Declining Oil Industry

The golden age of Mexican oil and gas began in the 1970s with the discovery of the supergiant offshore Cantarell field (once the second-largest oil field in the world) in the southern part of the Gulf of Mexico. Oil production peaked in 2004 at 3.38 million barrels per day (bpd), making Mexico the world’s fifth-largest producer. However, it began to fall precipitously as the Cantarell field aged, a situation that was aggravated when techniques were employed that boosted near-term production but depleted the field more quickly. 

The loss in production was partially offset as the nearby Ku-Maloob-Zapp complex of fields entered production, although it, too, has since aged. (Mexico’s sales of oil abroad have accordingly dropped, although the United States remains a market for heavy, high-sulfur crude which Mexico cannot process domestically.)

With Pemex unable to invest adequately to maintain reserves, Mexico’s oil production entered into long-term decline. By 2014, it produced only 2.4 million bpd, and by 2019, less than 1.7 million bpd. Production stabilized over the next four years but began to decline again, and by 2025, Mexico was producing only 1.46 million bpd. Peña Nieto (in office 2012-2018) undertook a major effort to address Mexico’s flagging production despite the fact that his Institutional Revolutionary Party (PRI) had a long heritage of statism and nationalism. He achieved the passage of a constitutional amendment and subsequent supporting legislation........

© The National Interest