1 hour ago
3
The US Treasury Department has sanctioned Mexican nationals and entities connected to a fuel smuggling network that funnels revenue to some of the country’s most powerful drug cartels. The action is the latest in a series of enforcement moves targeting the lucrative underground fuel trade known in Mexico as huachicol.
Since September 2024, the Treasury’s Office of Foreign Assets Control (OFAC) has designated 12 Mexican nationals and over 28 organizations tied to fuel theft networks associated with the Cartel Jalisco Nueva Generacion (CJNG). The cartel reportedly generates hundreds of millions of dollars annually from these operations alone.
How the smuggling machine works
The networks tap directly into pipelines, bribe Pemex employees for access and information, and transport stolen fuel across the US border. The product is often disguised as waste oil to avoid detection.
Fuel theft schemes have resulted in billions of dollars in losses for Pemex and the broader Mexican economy.
The sanctions campaign has unfolded in waves. On September 10, 2024, OFAC targeted nine nationals and 26 entities directly linked to fuel theft operations. On May 1, 2025, the designations expanded to include CJNG leader Cesar Morfin Morfin, known by the alias “Primito,” along with two logistics firms that facilitated the smuggling pipeline.
By December 17, 2025, the focus shifted to the Cartel de Santa Rosa de Lima and its leader, known as “El Marro,” highlighting that fuel theft is not the exclusive domain of any single criminal organization. The most recent round of sanctions, on June 30, 2026, targeted two additional individuals and nine firms involved in fuel smuggling operations.
The bigger picture: cartels as terrorist organizations
These sanctions are part of a broader US strategy that includes designating various Mexican cartels as foreign terrorist organizations. That designation unlocks a different tier of enforcement tools, from asset freezes to criminal penalties for anyone who provides material support.
What this means for investors and the energy sector
Companies operating in Mexican energy and logistics need to scrutinize their supply chains with more care than ever. Inadvertently doing business with a sanctioned entity carries legal consequences under US law, including potential asset freezes and criminal prosecution.
Investors should watch for continued escalation. The pace of designations has accelerated noticeably since late 2024, with new rounds arriving roughly every few months. Each wave expands the web of sanctioned entities, which means the risk of secondary exposure, where a legitimate business unknowingly transacts with a sanctioned counterparty, grows with every announcement.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
English (US) · 