Key facts
- Mexico's government will provide 81 billion pesos ($4.8 billion) in financial aid to Pemex next year, a 70% decrease from current support.
- The government expects Pemex to generate a cash surplus of 95 billion pesos ($5.63 billion) due to the oil price rally.
- Pemex's total debt stood at $79 billion at the end of the first quarter of this year.
- Pemex reported a net loss of 45.99 billion pesos ($2.6 billion) in the first quarter of this year.
- The company's second-quarter profit was 69.7% lower than in the second quarter of 2025.
Mexico's government is significantly reducing its financial support for the state-owned oil company Petróleos Mexicanos (Pemex), anticipating that a rally in oil and gas prices will allow the company to cover its needs. The government plans to provide only 81 billion pesos ($4.8 billion) in financial aid for the upcoming year, a reduction of 70% from current levels. This decision is based on expectations that Pemex will achieve a cash surplus of approximately 95 billion pesos ($5.63 billion) due to higher oil prices, spurred by geopolitical tensions including the U.S. and Israeli actions against Iran.
Despite the anticipated surplus, Pemex continues to grapple with substantial debt and production challenges. As of the end of the first quarter of this year, the company had reduced its debt to $79 billion, the lowest since 2014. However, boosting refining output has remained difficult, and issues with crude quality have alienated buyers. The previous administration had focused on re-establishing Pemex's monopoly, while the current Scheinbaum government has opened the industry to private players through mixed contracts.
Moody's had previously affirmed Pemex's rating, citing the government's commitment to providing timely financial support. However, the company posted a net loss of 45.99 billion pesos ($2.6 billion) in the first quarter of this year, marking its worst first quarter since 2020, even with higher oil prices. While Pemex did achieve a profit in the second quarter, it was significantly lower than the previous year, indicating deeper operational issues beyond oil price fluctuations. The ongoing conflict in the Persian Gulf presents an opportunity for Mexico to supply alternative oil sources to global buyers.