Core Insights - Mexico's refining sector is experiencing a significant recovery, with utilization rates improving markedly over the past year, particularly at key refineries like Tula and Dos Bocas [1][3][12] Refinery Utilization and Capacity - In November 2024, only one refinery had utilization rates above 50%, but by November 2025, five out of seven refineries exceeded this threshold, indicating a broader operational recovery [1] - Tula refinery achieved a 79% utilization rate, while Dos Bocas increased from 17% to 61% within a year, showcasing substantial improvements [1] - Despite these gains, actual refinery runs in November 2025 were only around 1.14 million barrels per day (b/d), significantly below the combined nameplate capacity of approximately 1.98 million b/d [2] Historical Context and Strategic Initiatives - The recovery initiative began in 2019 under former president Andrés Manuel López Obrador, aiming to rehabilitate aging refineries and reduce dependence on imported fuels [3] - The strategy includes integrating the new Dos Bocas refinery into the domestic fuel system to lift utilization rates and enhance energy independence [3] Export Trends and Domestic Production - Mexico's crude oil exports have declined sharply, from about 1.1 million b/d in 2020 to roughly 665,000 b/d in 2025, marking a nearly 40% drop [5] - The decrease in exports is attributed to increased domestic refining needs rather than upstream exhaustion, with a notable reduction in exports of Maya crude [5][12] - Diesel production surged from 162,000 b/d to 280,700 b/d (42% increase), and gasoline output rose from 307,000 b/d to 412,600 b/d (26% increase) between November 2024 and November 2025 [6] Import Dynamics - Average US diesel exports to Mexico fell from 187,000 b/d in 2023 to 118,000 b/d in 2025, a 37% reduction, while gasoline imports also declined [7] - The decline in imports indicates a shift towards greater self-sufficiency in refined products [6][7] Challenges to Recovery - Financial constraints remain a significant challenge, with federal subsidies totaling MXN 833.4 billion (approximately US$46.3 billion) between 2018 and 2024, complicating the sustainability of the refining system [8] - Energy security issues persist, as Mexico's inland refineries face disruptions in electricity supply, impacting operational efficiency [9] Future Outlook - The Dos Bocas refinery is expected to play a crucial role in boosting domestic production, while the Tula refinery's modernization could further enhance output [10][11] - The completion of long-delayed projects, such as Tula's coker, is critical for achieving sustained improvements in refining capacity and product output [11][12]