US refiners face supply drop from biggest foreign crude supplier as Mexico redirects oil homeward

America’s Gulf Coast refineries have a problem that no amount of domestic shale production can fix. Their biggest source of heavy crude, the dense, sulfur-rich oil their facilities were literally built to process, is drying up. Mexico’s state-owned oil giant Pemex is redirecting barrels toward its own expanding refining operations, and US processors are about to feel the squeeze. The expected decline is substantial. Mexican heavy crude exports to US Gulf Coast refiners could fall by 200,000 to 250,000 barrels per day by 2026. The heavy crude dilemma US oil production is booming, but it’s almost entirely the wrong kind. Shale wells pump light, sweet crude. Gulf Coast refineries, many built decades ago, are configured to run on heavy, sour grades. Canada has long been the dominant foreign crude supplier to the US, accounting for roughly 52% to 63% of total crude imports historically, with the figure sitting around 60% in 2022. Mexico has traditionally held the second spot, sending its flagship Maya grade crude north to Gulf Coast facilities. Pemex has been shifting strategy. The Mexican government has invested heavily in domestic refining capacity, and the state-owned company is now ...