Mexican state oil company Pemex faces a severe production crisis; Its crude oil production fell in April to its lowest level in 45 years; Which portends major economic challenges for the country.

The roots of this crisis go back to the massive debt accumulation that Pemex suffers from. The value of its debt reached $101.5 billion at the end of the first quarter of 2024.

The reasons for the accumulation of debt are attributed to the decline in global oil prices, which led to a decrease in Pemex’s revenues. This made it difficult for it to repay its debts, in addition to the huge investments made by Pemex in new projects, which increased its debts.

The Mexican government allocated more than $4 billion to support Pemex in 2024, but this support was not enough to compensate for the decline in production and the rise in debt.

Pemex's production crisis was exacerbated by the non-payment of service companies' dues. Which led to some companies stopping working with them partially or completely. Which affected its ability to produce.

A fire at a Pemex platform in the Gulf of Mexico in April also led to a decline in production by about 20,000 barrels per day.

It should be noted that the current Mexican President, Andrés Manuel Lopez Obrador, seeks to use PEMEX in the upcoming presidential elections, in support of the most likely candidate, Claudia Sheinbaum.