U.S. Fuel Exports to Mexico Sink to 16-Year Low as Pemex Refineries Claw Back Demand

Mexico's imports of American gasoline and diesel fell to their lowest level in 16 years in 2025, the clearest sign yet that Petroleos Mexicanos has finally turned its refining system from a punchline into a competitor. Pemex ran its plants at the highest rates in a decade last year, and the ramp-up of the Olmeca refinery at Dos Bocas pushed enough domestic product into the market to displace a chunk of the fuel that Gulf Coast and West Coast refiners have shipped south for years. For an industry that treats Mexico as its single largest export customer, that is not a small shift.

The numbers behind the headline are blunt. U.S. diesel exports to Mexico averaged about 118,000 barrels per day in 2025, down from 187,000 bpd in 2023, roughly a 37 percent drop. Gasoline exports slipped from about 338,000 bpd to 309,000 bpd over the same stretch. On the West Coast, the decline was sharper still: PADD 5 distillate exports to Mexico fell 41 percent in 2025, to 10.9 million barrels from 18.6 million the year before, the lowest since 2022. Add it up and the pattern is consistent across every corridor into the country.

What Dos Bocas actually did

The Olmeca refinery at Dos Bocas, in Paraiso, Tabasco, was the centerpiece of former President Andres Manuel Lopez Obrador's push for energy self-sufficiency. It was the first refinery built in Mexico in 40 years, carries a nameplate capacity of 340,000 bpd, and ran years late and billions over its original $8 billion budget. Skeptics, myself included, spent a long time waiting for it to produce anything close to spec. In 2025 it started to.

Dos Bocas contributed an average of about 139,000 bpd of processed crude across the year, but the more telling figure is the trajectory. Output climbed from roughly 7,000 barrels in February to around 245,000 barrels by December, when the plant ran at 77.5 percent of installed capacity, its best month on record. Gasoline production from the site was uneven, dipping below 50,000 bpd in August against a 170,000 bpd design capacity, so this is not a finished story. But a refinery that produces almost nothing for most of a decade and then hits three-quarters of capacity is a refinery that has changed the math.

The whole system woke up, not just one plant

Dos Bocas gets the attention, but the bigger driver is that Pemex's older refineries stopped bleeding. The company's seven-plant national refining system processed an average of about 1.03 million bpd in 2025, the highest combined run rate since 2015 and roughly double the 511,000 bpd it managed in December 2018. In November the system hit 1.14 million bpd, a ten-year high.

Fuel output followed. Pemex reported 2025 gasoline production near 346,000 bpd, up 109 percent from December 2018 levels, with diesel around 230,000 bpd (up 131 percent) and jet fuel near 44,000 bpd. Those are the barrels that used to come off a tanker from Houston or Los Angeles. Every barrel Pemex makes at Tula, Salina Cruz, or Cadereyta is a barrel a U.S. refiner does not sell into Mexico.

Why U.S. refiners should care

Mexico has long been the release valve for American refined product. When U.S. demand softens, exports south keep utilization high and inventories manageable. That valve is tightening at an awkward moment. U.S. gasoline inventories are the highest since the pandemic and diesel stocks sit at a two-year high, which means the product Mexico is no longer buying has nowhere obvious to go.

The exposure is concentrated. Valero, Marathon Petroleum, and Exxon Mobil are among the refiners most tied to the Mexican trade, and Gulf Coast operators built pipeline and terminal networks specifically to move product across the border. PADD 3 exports to Mexico fell around 13 percent in 2025, a milder hit than the West Coast but still a reversal of a decade of growth. There are secondary factors muddying the West Coast picture, including shrinking California refining capacity and a near-total collapse in renewable diesel flows, but the through-line is that Mexico is simply importing less finished fuel.

The other side of the ledger: crude

There is a mirror image to all of this that cuts against U.S. refiners a second way. As Pemex feeds more of its own crude into its own plants, it exports less of it. Mexican crude exports fell to about 503,000 bpd in December 2025, down from roughly 1.1 million bpd in 2020. Maya, the heavy grade that Gulf Coast refiners are configured to run, dropped to about 253,000 bpd in December, down some 86 percent from 2020.

"US refiners need heavy crude, and the US is rapidly losing Mexican and Canadian oil," energy consultant John Padilla told reporters.

So the squeeze runs in both directions. Pemex is keeping more of its heavy barrels at home to feed refineries that then sell less gasoline and diesel back to the United States. A U.S. refiner set up for Maya can lose the feedstock and the export customer in the same year.

How durable is this?

The reasonable question is whether 2025 marks a structural break or a good year that fades. Pemex has announced plans to lift total refined output toward 1.5 million bpd starting in late January, an ambitious target for a company with a long history of missing them. Dos Bocas has caught fire, literally, in incidents that underline how young and untested the plant still is, and Pemex's balance sheet remains one of the most indebted in the industry. None of that guarantees the run rates hold.

What is not in dispute is that the direction has reversed. For 15 years the safe assumption was that Mexican fuel demand growth would keep flowing to U.S. refiners. In 2025 that assumption broke. Even if Pemex only holds the ground it took rather than gaining more, American refiners have lost a piece of their most reliable export market, and they lost it at a moment when their tanks are already full. The Dos Bocas project cost far more and took far longer than promised. It is now doing exactly what it was built to do.