Mexico is becoming one of the biggest customers for U.S. fuel exports, which could factor into the presidential elections given the propensity of Republican front-runner Donald Trump to make Mexico a pariah on trade.
Mexico has become the reluctant target of barbs from Trump from day one of his campaign. The real estate mogul on the campaign trail often describes a scenario in which the U.S. is losing on trade when it comes to its neighbor to the south. The U.S. has a $4.3 billion trade deficit with Mexico.
But that is not the case with energy, as Mexico becomes one of the U.S.’s more faithful customers of refined products.
Mexico has always been a source of oil for the United States. In 2014, Mexico provided 11 percent of U.S. crude oil imports, but its production capacity has been waning. Now the U.S. is sending its crude oil products to Mexico.
U.S. exports of petroleum products such as gasoline and fuels surged in 2015, according to a Friday report by the Energy Information Administration, the Energy Department’s independent analysis wing. And the leading destination of those exports was Mexico. In particular, the Central American country is becoming a fan of American-made diesel.
The U.S. exported diesel — the country’s biggest petroleum export — to 88 countries last year, with Mexico being the top destination with 12 percent of the per-day total. Total diesel exports averaged 1.19 million barrels a day last year, an increase of 85,000 barrels a day from 2014, the agency reported.
One of the big reasons for the rampup in exports was continually “high U.S. refinery runs and a warmer-than-normal heating season,” presumably driven by the low price of oil, which created a surge in U.S. fuel inventories above the five-year average, the agency said. The increased inventories drove down prices and made U.S. products more attractive. EIA said the low price and high inventory also drove up exports of diesel to Western Europe.
When it comes to petroleum, Trump appears to be more concerned with the Middle East than with Mexico, though. In a Washington Post interview earlier this week, Trump referred to oil only when discussing how he would “defend the areas with the oil” in Iraq. “And I would have taken out a lot of oil. And, uh, I would have kept it.”
Trump is more concerned about creating a hedge against Iran by taking control of Iraq’s oil resources from Islamic State radicals.
“Iran has the oil, and they’re going to have the oil, well, the stuff they don’t have, because Iran is taking over Iraq as sure as you’re sitting there.”
