Mexico’s dirty industry keeps a transitioning world economy afloat

MXPE Weekly Essentials ft. justice’s slow rate of work, US-China tiff over Mexico, and other highlights in Mexican politics, policy, and markets from the past week.

MXPE Weekly Essentials. Only the most important news in Mexican politics, policy, and markets from the past week.

Mexico’s new refinery at Dos Bocas in the state of Tabasco has been a bit of a laughingstock for investors and critics of the government since it was opened in 2022. It is still only refining 25% of the oil it is supposed to be and many point to the fact that the world’s economy is transitioning away from fossil fuels anyway.

Transition is the key word here though, and Mexico has the opportunity to profit from playing arbiter in this changing energetic scene. If and when the rest of Dos Bocas´ capacity comes online it will be more or less equivalent to all the additional refining capacity being opened globally this year. Subtract the refining operations going offline, mostly in the US and Europe, and the truth is that capacity will not have grown in 2025.

Surely the world should be reducing its consumption of oil? The answer is, ideally yes, but the market is simply not moving in that direction.