U.S. West Coast Diesel Exports to Mexico Drop 41% in 2025 as Trade Flows Shift

U.S. West Coast distillate exports to Mexico in 2025 fell by more than 41% from 2024, according to Energy Information data, leading fuel analysts and traders to question whether the decline was the result of cyclical demand shifts or Mexico’s push to increase domestic refining capacity.

EIA in late February said West Coast (PADD 5) distillate exports to Mexico fell 10.923 million bbl in 2025 from 18.628 million bbl in 2024, the lowest reported level since 2022, when exports totaled 8.228 million bbl. Most of the distillate imports were ULSD, the agency reported.

The data also showed gasoline exports to Mexico from PADD 5 in 2025 fell by to 2.587 million bbl from 2.897 million bbl in 2024, a nearly 11% decline.

Total U.S. distillate exports to Mexico were put at 80.15 million bbl in 2025, down more than 18% from 2024’s 98.21 million bbl, according to the agency. Mexico also imported roughly 10 million fewer barrels of distillates from the Gulf Coast (PADD 3) in 2025, a 13% drop from 2024..

“What you’re seeing…is a PADD 5 dynamic,” Kenneth Medlock, a fellow at the Baker Institute and senior director of Rice University’s Center for Energy Studies, said.

Most energy trade between the U.S. and Mexico occurs in the Gulf Coast, while the West Coast accounts for between 4% and 4.5% of total volumes to Mexico, he said.

Medlock said the sharp drop in West Coast distillate exports is likely the result of weaker regional demand and a drop in California’s refining capacity.

“As a refiner you think, ‘What is the market going to be for anything I produce at a refinery in PADD 5?’ It starts to look increasingly like there’s not going to be one…You’re going to begin to retire things as they reach [the end of their] useful life…You’re certainly not going to expand,” he added.

“But there still is diesel demand in the region will need to be met by imports from somewhere…you don’t need as much from Mexico and you certainly don’t have as much to export to Mexico.”

Unlike refined products that move from PADD 3 to Mexico’s East Coast, which are typically transported by tanker, products shipped from the West Coast to Mexico generally move by tanker truck or rail, using cross-border rail networks operated by Canadian Pacific Kansas City and Ferromex, which operates the largest railroad network in Mexico, according to energy analyst RBN Energy.

Additional volumes of U.S.-sourced refined products are also moved to Mexico by pipeline or tanker.

Despite the recent decline, Medlock said exports remain significantly higher than in 2025 or 2010.

“There’s constant fluctuation,” he said.

Distillate exports from PADD 5 rose about 17% between November and December, according to EIA data and the agency is scheduled to release its January estimates later in March.

A West Coast market source said Mexico’s 340,000 b/d Dos Bocas refinery has been running at about 80% of capacity since the start-up of its fluid catalytic cracking unit and that could eventually lead to a reduction in Mexican imports.

Mexican President Claudia Sheinbaum is aiming to increase state-owned oil company Pemex’s output to meet a larger share of domestic demand.

The company recently said its seven domestic refineries processed an average of 1.014 million b/d of crude in 2025, mainly driven by gains in Dos Bocas’ output.

A West Coast trader said a steep drop in renewable diesel imports into the region could also be playing a role in the drop in PADD 5 exports

According to EIA data, renewable diesel imports from all countries into PADD 5 fell sharply compared with the same period a year earlier. Imports dropped 96.8% in April, followed by declines of 92% and 93% in May and June. During the winter months, renewable diesel imports fell between 58% and 20% year over year.

” (The West Coast has) gone from massively importing renewable diesel to virtually none,” the PADD 5 trader said.

EIA reported in October that the total value of U.S. energy trade with Mexico declined from $72 billion in 2023 to an estimated $57 billion in 2024.

Trade value, which reflects the combined value of energy imports and exports between the two countries, is driven by both commodity prices and traded volumes.

The value of energy imports fell 13% in 2024 to $41 billion, following a sharper 24% decline from 2022 to 2023. The inflation-adjusted value of energy imports from Mexico to the U.S. fell 34% in 2024 to $16 billion.

The drop in trade value was largely driven by declining crude oil prices during that period, Medlock said.

“It’s really more about what are the trends in price and I think we saw over the last 18 months a general tendency for the price to come down,” he said.

“The actual volume of gasoline and other products traded hasn’t changed much in the last decade.”

Reporting by Shaheer Naveed, snaveed@opisnet.com and José Luis Adriano, jadriano@opisnet.com; Editing by Jeffrey Barber, jbarber@opisnet.com