With a change of leadership under way in Mexico following June elections, the incumbent administration is expected to maintain a focus on energy independence and self-sufficiency.

Cautious consistency about Mexican energy

Intermarine’s Industrial Momentum at the port of Veracruz

On June 1, 2024, Claudia Sheinbaum won a landslide victory in Mexico’s national election and in doing so becomes the country’s first female president. Winning 60.7 percent of the vote the left-wing climate scientist was elected primarily on a message of continuity with outgoing president Andrés Manuel López Obrador

The victory of the National Regeneration Movement (Morena), which was set up 10 years ago by Mr Obrador, means little deviation from the status quo is likely to take place in the near future. 

 

Concerns over continuity

Following the victory of the leftist coalition, stocks in Mexico fell over 6 percent and the iShares MSCI Mexico ETF closed 10.7 percent lower on heavy trading volume, marking the worst day for the Mexican stock market since Covid 19-related shocks in 2020. The Mexican peso also saw a decline. 

A strong proponent of energy independence, Mr Obrador previously imposed restrictions on private and foreign investment in oil, gas and electricity. Mexico is the only G20 member to not have any explicit net-zero aims and the country is still significantly dependent on oil, gas and coal. Despite the drive towards self-sufficiency, the country is still heavily reliant on natural gas imports from the USA, which will likely play a crucial role in the economy for some time. 

Renewable opportunities

While Ms Sheinbaum’s message on energy has primarily been one of consistency, if she remains true to form then the renewable energy sector could be a beneficiary. Green energy investments were among her campaign trail declarations. This would indicate a change of tact from her predecessor who in recent years has chosen to focus attention on supporting state-owned Pemex and the country’s’ petrochemical and petroleum projects.

Mac Bruton, Intermarine vice president of business development, speaking in HLPFI’s May/June 2024 Mexico and Central America report on the heavy lift and project logistics market, confirmed that the country’s energy priorities could change with the new administration. “We do expect the wind industry to pick up in Central America and Mexico, with cargo originating in northern Europe – but we are 12-24 months out from active wind business,” he said.

Mexico’s abundant renewable energy resources could give the country a substantial competitive edge, according to a spokesperson for Mexican heavy haul company Tradelossa. However the proportion of electricity generated from renewable sources in Mexico remains low, with uncertainties over regulations hindering the private sector.

The full assessment can be seen here.