The situation in Mexico’s oil industry continues to rapidly disintegrate as falling oil production and rising costs resulted in an $18 billion fourth-quarter loss for the state-run oil company, PEMEX. Part of the reason for the huge financial loss at PEMEX was the fall in the value of the Mexican Peso. While PEMEX’s costs are in Pesos, it sells crude oil and purchases petroleum products in Dollars. Because the Mexican Peso declined 8% versus the Dollar, it put a huge strain on the company’s year-end financials. Regardless, Mexico’s oil production continues to fall due to the natural decline from resource depletion. However, as Mexico’s oil production falls, its net oil exports have dropped significantly as well. Thus, falling net oil imports translates to less revenue for PEMEX. According to BP’s 2017 Statistical Review, Mexico’s net oil exports hit a low of 587,000 barrels per day (bd) in 2016, down […]