Energy Barriers in Mexico Raise Concerns Ahead of USMCA Review: US Trade Representative
Persistent friction in Mexico’s energy sector could emerge as a risk to concluding the upcoming review of the United States-Mexico-Canada Agreement on schedule as the U.S continues to flag regulatory barriers and operational constraints affecting companies operating in the country.
In its National Trade Estimate Report on Foreign Trade Barriers published in March, the U.S Trade Representative outlined several contentious issues in Mexico’s energy sector that would need to be addressed to reach a timely agreement.
The report alleged that private companies operating in Mexico face persistent obstacles. These include delays, rejections and regulatory inaction on applications for new permits or modifications by the country’s new energy regulator, the National Energy Commission.
“Unexplained or unjustified suspensions or revocations of existing permits, as well as other impediments, undermine private companies’ ability to operate energy facilities,” the report said.
The USTR also pointed to the Hydrocarbons Sector Law introduced in October, which bans fuel transloading activities, saying it “reduces logistical flexibility and increases operating costs for U.S. companies, unfairly favoring Pemex.”
Additionally, U.S. companies supplying Mexico’s oil and gas sector have reported unprecedented challenges in receiving payments from Pemex for services rendered. As of Dec. 31, 2025, some firms reported overdue payments totaling more than $2.5 billion, according to the USTR report.
The Mexican government has rejected previous U.S. claims that it had violated the USMCA by favoring state-owned energy companies Pemex and CFE, saying its recent regulations are consistent with the trade pact.
Mauricio Peña, founding partner at León Barrena Rodríguez & Partners LLP, a Mexico City and Washington D.C. firm specializing in cross-border trade and risk, said Mexico may need to strengthen provisions ahead of the review to preserve certainty for investors.
He added that U.S. interests appear divided between those seeking a swift conclusion to the negotiations and others that may favor extending the process into the November elections as a political bargaining tool.
“Extending the process is a double-edged sword,” Peña said, noting that a Republican loss in the midterm elections could weaken the party’s leverage in negotiations.
“For the Mexican government, it would be a major relief to have the negotiations largely concluded by July,” he added, as support from business leaders hinges on avoiding prolonged uncertainty over the future of the
agreement.
The USMCA is scheduled for a joint review in July to assess recommendations and determine next steps, though U.S. Trade Representative Jamieson Greer said this week that talks are likely to extend beyond the deadline, potentially adding pressure to the process.
Energy security concerns have also gained prominence amid recent geopolitical tensions. A two-week cease-fire between the U.S. and Iran announced Tuesday has raised expectations that Middle Eastern oil flows could stabilize with the reopening of the Strait of Hormuz.
However, Mexico should prioritize securing its energy imports within the USMCA framework, Peña said, particularly if Washington were to restrict or redirect flows to the local markets in the event of prolonged disruptions in the Middle East.
Mexico’s government acknowledged this week that the country imports about 75% of its natural gas demand, primarily from the U.S., highlighting its exposure to external supply shocks.
“There is a need for the country to anticipate these vulnerabilities,” Energy Minister Luz Elena González said.
Given that most natural gas is used for power generation, the government plans to increase the share of renewable energy in electricity generation from 24% to 38% by 2030, while also aiming to boost domestic output from state-owned Pemex by 2035.
Mexico has pledged to become self-sufficient in fuels, but it still relies on U.S. imports to meet more than half of domestic demand.
The country imported more than 398,000 b/d of crude and petroleum products from the U.S. in 2025, according to data from the U.S. Energy Information Administration. This included roughly 163,000 b/d of gasoline, 80,000 b/d of diesel, and 82,500 b/d of natural gas.
“U.S. energy exports to Mexico, particularly natural gas, are a central issue, and Americans want that to continue,” Peña said.
According to the USTR report, total U.S. goods trade with Mexico reached $872.8 billion in 2025, with exports totaling $338 billion, up 1.2% from 2024, making Mexico the largest export market for U.S. goods that year.
Meanwhile, U.S. imports from Mexico totaled $534.9 billion, a 5.8% increase year over year.
Peña said the next three months will be critical in determining whether negotiations show meaningful progress and improve the overall outlook for the agreement.
The USMCA doesn’t expire until 2036, but the three countries must conduct a formal joint review to decide whether to extend the agreement, negotiate changes or maintain it with additional review periods.
“The Mexican government’s goal is to have something in place by July 1, but that may be overly optimistic,” he said.
Reporting by José Luis Adriano, jadriano@opisnet.com; Editing by Karla Omaña, komana@opisnet.com and Michael Kelly, mkelly@opisnet.com