Is Russia About to Hijack the Western Hemisphere’s Energy Game from Right Under the U.S.’ Nose?
Amidst the tariff wars, are we about to see the birth of new energy dynamics in the Americas? A few days ago, Russia offered to supply liquefied natural gas to the United States’ neighbor, Mexico. Because of the strategic, economic and geopolitical implications, the move quickly made sector analysts sit up and take note
Media reports quoted Russia’s Energy Minister, Sergei Tsivilev, as saying that the country was already working with Mexico in other sectors. Now it was offering to share its liquefied natural gas technologies as well as to supply LNG directly.
According to a post on the social media channel X, the Russian embassy is prepared to provide several things to Mexico. These include tech for oil extraction to overcome the hurdle of geological conditions and solutions aimed at improving the efficiency of oil processing.
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Mexico Gets Most Natural Gas from the U.S.
Nearly three-quarters of Mexico’s natural gas needs are met through imports. These supplies come almost exclusively from the U.S., primarily via pipeline, and are used for power generation and industrial operations. In fact, the U.S. is Mexico’s largest trading partner.
Russia’s announcement is thus very significant for two reasons. The first is the major role that the U.S. plays in supplying energy to Mexico. The second is that in May of this year, Pemex, Mexico’s state oil company, announced it was working to restart shut oil wells in an effort to push production. The firms stated at the time that this was to meet the Mexican government’s output target of 1.8 million barrels per day. About one-third of Pemex’s 3000 plus wells in Mexico are currently shut down.
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Is Russia Issuing a Challenge?
If successful, this move will help Russia deepen its ties in the Western Hemisphere, particularly with a U.S. neighbor. Some geopolitical experts claim it will also be looked upon as a subtle challenge to U.S. influence in the region, particularly as Mexico explores ways to bolster energy security after disruptions like the 2021 Texas winter storm.
From the U.S. side, officials may interpret Mexico’s engagement with Russia as a pivot away from its traditional energy alignment. Given the current geopolitical climate, any cooperation with Russia, especially in critical sectors like energy, could raise eyebrows in Washington.
A Step Forward for Mexico
About 10 years ago, Mexico began ushering in energy reforms, opening its energy sector to private and foreign investment for the first time in 75 years. Among other things, the aim was to reduce dependence on the state-owned companies and attract capital for investments in the oil, gas and renewables sectors. By 2019, Mexico had held some rounds of renewable energy auctions, which account for about 20% of total electricity generation.
Through its trading arm, PMI, Pemex stated that it expects a decline in crude exports this year. According to company director Margarita Perezhis, this comes as more supply is redirected to domestic refineries, particularly the new Olmeca facility. Once fully operational, the refinery will process 340,000 barrels per day, with around 100,000 barrels allocated to it from Pemex’s own output.
Russian Influence in Mexico Trade
If Mexico were to accept the Russian liquefied natural gas offer, it would further reinforce the feeling in the Western world that Russia can continue to thrive despite the sanctions imposed on it post-Ukraine war. But here’s the thing: Russia’s trade with Mexico is already robust. After Brazil, Mexico is the country’s 2nd major trading partner in Central and Latin America.
For example, Russia already accounts for almost a quarter of all Mexican imports of fertilizers. The latter also imports rolled steel, aluminum and numerous other metals from Russia. Moreover, many Russia-based multinationals in various sectors operate in Mexico and vice versa.
According to this report, Mexico announced in 2022 that it would not be taking part in any economic sanctions against Russia. In 2024, data from the Bank of Mexico showed that Russia’s exports to Mexico increased by about 70%.
What Next for Liquefied Natural Gas?
Since the start of the decade, the global liquefied natural gas sector has seen a surge in infrastructure development. According to one analysis, there are over US $1.1 trillion in new terminals under construction in Mexico as of last year. This momentum is largely being fueled by rising gas demand in Asia, booming U.S. output and Europe’s move to cut down reliance on Russian energy following the Ukraine invasion. U.S. producers, in particular, have been eyeing ports along Mexico’s coastline to streamline transoceanic shipping routes.
However, some experts agree that these ambitions face headwinds ranging from volatility in global gas markets to emerging political friction. Tensions may escalate between U.S. President Donald Trump and Mexico’s newly elected leader, Claudia Sheinbaum, over issues ranging from trade and tariffs to migration, and when this LNG offer by Russia is accepted.
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