Mexico cuts Pemex support 70% to 81 billion pesos in 2027 budget

September 11, 2026 at 03:00 AM2 min

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Mexico's government will slash financial support for state oil company Pemex by 70% to 81 billion pesos ($4.8 billion) in next year's budget. The cut follows expectations that Pemex will post a rare cash surplus of 95 billion pesos ($5.63 billion) due to the oil price rally. The move comes even as Pemex remains the world's most indebted oil company, with debt reduced to $79 billion as of end-Q1 2026.

Key Facts

Mexico's 2027 budget allocates 81 billion pesos ($4.8 billion) in financial support for Pemex, down 70% from this year.
The government expects Pemex to post a cash surplus of 95 billion pesos ($5.63 billion) due to the oil price rally.
Pemex's total debt stood at $79 billion as of the end of the first quarter of 2026, the lowest since 2014.
Pemex reported a net loss of 45.99 billion pesos ($2.6 billion) in the first quarter of 2026, its worst first quarter since 2020.
Moody's kept Pemex's rating unchanged in May 2026, citing expectations of continued government support.

Budget Support Cut

The Mexican government will provide Pemex with 81 billion pesos ($4.8 billion) in financial assistance in the 2027 budget, a 70% reduction from this year's support. President Claudia Sheinbaum said the cut aligns with the government's plan to limit support for Pemex by 2027. The decision is based on expectations that Pemex will benefit from the oil and gas price rally spurred by the U.S. and Israeli war against Iran. The government projects Pemex will post a cash surplus of 95 billion pesos ($5.63 billion) as a result of higher oil prices.

Debt and Financial Position

Pemex is the world's most indebted oil company, with total debt of $105 billion as of mid-2025, including $20 billion in unpaid supplier bills. By the end of the first quarter of 2026, Pemex had reduced its debt to $79 billion, the lowest level since 2014. Despite the oil price surge in March 2026, Pemex posted a net loss of 45.99 billion pesos ($2.6 billion) in the first quarter. The first-quarter loss was the worst for Pemex since 2020, according to Mexican media.

Government Policy Shift

The previous Mexican administration supported Pemex by turning it back into a monopoly on the domestic energy market. The Sheinbaum government has moved to open the oil industry to private players through a new contract framework for joint ventures called mixed contracts. Under mixed development allocations, Pemex can enter into agreements with one or more private firms. Moody's kept Pemex's rating unchanged in May 2026, citing expectations that the government will continue to provide very high and timely support.