Mexico tries to convince Cuba to pay for "donated" oil

Mexican state-owned oil firm Petroleos Mexicanos (Pemex) is evaluating methods to start charging Cuba for multi-million-dollar oil shipments that Mexico has donated to the island nation’s communist regime, Bloomberg stories. mentioned Tuesday.

The choice is alleged to stem from rising oil costs, with costs heading in the direction of the $100 per barrel stage, in addition to the fiscal deficit issues confronted by Pemex and Mexico. The federal government of far-left Mexican President Andres Manuel Lopez Obrador has to date donated multiple million barrels of oil in “humanitarian support” to the Castro regime throughout 2023.

Lopez Obrador is a powerful ally of the Castro regime. Mexican President Granted This 12 months, the figurehead of the Castro regime, Miguel Díaz-Canel, was awarded the Order of the Aztec Eagle, Mexico’s highest honor to foreigners.

Cuba continues to endure from extreme gasoline shortages, considered one of many signs of the continued systematic collapse of the nation and the inhumane dwelling circumstances to which Cubans have been subjected after six many years of communist rule, which have left the nation in ruins.

Over the previous twenty years, Cuba has relied on steady oil shipments from Venezuela’s socialist regime to cowl home demand as a part of agreements signed between the late dictators Fidel Castro and Hugo Chavez within the early 2000s. Venezuelan oil shipments to Cuba have elevated considerably decreased In current months, Venezuelan oil exports to the USA, from which the regime advantages, have steadily elevated thanks to grease sanctions reduction granted by President Joe Biden’s administration final 12 months.

In accordance with info from the Mexican Ports Authority and ship actions tracked by Bloomberg, the Mexican authorities despatched 350,000 barrels of refined oil from Pemex as donations to Cuba in June and a further 700,000 barrels in July. The worth of the 2 shipments is estimated at a complete of $77 million, in accordance with the typical estimate of Mexican oil costs in these two months.

The June and July shipments signify Mexico’s first oil exports to Cuba since 2019. Mexico didn’t renew its oil donations to Cuba throughout August.

Reuters mentioned Pemex’s six oil refineries in Mexico are struggling to spice up their oil refining output and are presently working at barely half capability, which in flip is forcing Mexico to import gasoline to provide its home market, reported on Tuesday.

By August, Pemex’s crude oil processing was roughly 797,000 barrels per day, down from 816,000 barrels per day final 12 months. Nevertheless, in terms of gasoline, Pemex may solely produce 242,000 barrels per day in August, the month with the bottom manufacturing ranges of 2023 to date. Pemex’s crude oil processing manufacturing has been declining progressively over the previous 15 years.

Pemex can be thought of essentially the most In debt Oil firm on the planet. Pemex has short-term debt I exceeded Its personal money sources since 2020 and the corporate’s debt obligations exceeded $110 billion as of June.

The decline in crude oil and gasoline manufacturing compelled Mexico to extend its gasoline imports by 17 p.c final month. Mixed with Pemex’s extreme fiscal deficit, this has led the nation to judge the opportunity of imposing duties on Cuba for the oil it had hitherto offered free of charge to Castro’s communist regime.

“Why not? We now have to see what it may be, what sort of deal,” Mexican Overseas Minister Alicia Bárcena stated in an interview in New York throughout her participation within the United Nations Basic Meeting. “We now have a monetary state of affairs, in fact. “It is not simple to donate.”

Bloomberg said in its report that it’ll not be simple for Mexico to promote oil to Cuba because of the present US sanctions imposed on the communist regime. Bárcena defined that any sort of measures that the Mexican authorities decides to implement on this difficulty should keep away from violating US sanctions.

Bárcena defined that oil donations to Cuba had been offered by means of the Mexican Company for Worldwide Improvement Cooperation, however with crude oil costs rising by as much as 25 p.c over the previous three months, along with Mexico going through its largest fiscal deficit in additional than three months. Many years have compelled the nation to seek out new sources of income to offset the rising deficit and ease the stress that Cuba’s oil donations placed on Mexico’s public funds.

Mexico’s draft finances 2024 foot This month, it expects a deficit of about 1.7 billion Mexican pesos ($96.5 million) for subsequent 12 months, an quantity equal to 4.9 p.c of the nation’s gross home product. Mexico has not skilled a deficit of this sort since 1989.

Christian Okay. Caruso is a Venezuelan author who paperwork life underneath socialism. You possibly can comply with him on Twitter here.

Leave a Reply

Your email address will not be published. Required fields are marked *