Venezuela's Oil Rebound Poses Risk to Mexico's Economy

A potential overhaul of Venezuela's oil industry could trigger a rapid recovery in its exports, threatening Mexico's market share and potentially slowing its economic growth by 2026, according to the Mexican Institute of Finance Executives (IMEF).

Mexican GDP growth is forecast at 1.3% for 2026, but this outlook faces several risks. A key concern is a potential shift in global crude oil flows if Venezuela successfully attracts new investment to revitalize its battered energy sector.

Shifting Tides for Oil Investment

According to IMEF president Gabriela Gutierrez, Venezuela could once again become an attractive destination for upstream capital if the country achieves political stability and provides operators with secure property rights.

"Venezuela could become more attractive for oil investment than Mexico, which has already seen crude producers reduce their interest," Gutierrez noted.

Currently, Mexico is the larger producer. In 2025, state-owned Pemex and several smaller private firms produced approximately 1.6 million barrels per day (b/d). Pemex, the only Mexican company authorized to export crude, shipped about 600,000 b/d from January to November 2025.

In contrast, Venezuela's crude output was just 934,000 b/d in November, based on an average of OPEC secondary sources. This is a dramatic fall from its production levels of over 3 million b/d in the early 2000s, a decline largely driven by underinvestment and U.S. sanctions.

However, recent shifts in U.S. policy have allowed more Venezuelan crude back onto the market. Chevron, the second-largest U.S. oil producer, now operates in Venezuela with state firm PdV under a special sanctions waiver. In December, Chevron imported around 120,000 b/d of Venezuelan crude into the United States.

The Long Road to Recovery

Boosting output significantly will not be easy for either nation. Gutierrez estimates that both countries would need to invest tens of billions of dollars, with a payoff period of five to ten years.

Mexico faces major hurdles in financing new upstream projects, as its government has limited capacity to support the heavily indebted Pemex.

Venezuela presents its own set of challenges for investors. The country's unstable political environment remains a primary risk. A meaningful turnaround would require costly repairs to essential energy infrastructure, from pipelines to power grids. It would also demand access to modern equipment and a skilled workforce. Furthermore, U.S. producers will need clear legal frameworks for contracts and significantly higher oil prices to justify the massive investments required.

Venezuela's Decisive Advantage: Reserves

The critical difference between the two nations lies in their crude reserves. Mexico holds proven reserves of around 7.5 billion barrels. Venezuela, on the other hand, reports over 300 billion barrels.

"Even conservative specialist estimates place Venezuelan reserves at over 10 times larger than Mexico's estimated reserves," Gutierrez said, highlighting the country's immense long-term potential.

Mexico's Export Strategy Under Scrutiny

Mexico's strategic decision to cut crude exports in favor of domestic refining has already cost the country valuable market share, according to Victor Herrera, IMEF's economic studies chair.

"We export less every year, while Venezuela is doing everything possible to export more," Herrera explained. He added that diverting crude to national refineries has generated financial losses, further weakening Pemex's already strained financial position.