Mexico’s Oil Woes

On March 18th 1938 an important moment in Mexican history happened: all foreign oil companies were removed. Mexicans celebrate this day in a show of civic pride. But since that day Mexico has been crippled in getting their oil out of the ground. Their inability to efficiently process oil threatens their own country but the US as well.

Pemex, Mexico’s national oil company, is in a state of upheaval. Mexico, one of the world’s top exporting oil countries could be importing oil very soon. If Mexico lags behind in production, it will effect the US economy significantly, since Mexico is the third largest supplier of oil to the US. Those barrels will have to be replaced and it will cost a pretty penny.

Now, Mexico still has plenty of oil beneath the waters of the Gulf of Mexico; however, they lack the technology to get to it. Trying to reverse the 1938 declaration will not be an easy task in congress and since oil determines 35% of Mexico’s revenue, the outlook on Mexican oil is pessimistic. If Pemex, whom employ 140,000 people, faces a crisis, then the whole country could very well face a crisis.