Introduction to Pemex’s First Quarter 2025 Performance
The results of Pemex at the end of the first quarter of 2025 are not very encouraging, primarily due to losses exceeding 40,000 million pesos after three years of profits in the same period. The company’s financial outlook remains very complicated, although there are some operational data points that, if they become trends, could guide the petroleum giant towards better performance.
Currency Exchange Risk and Financial Pressure
Pemex’s exposure to currency exchange volatility poses risks that sometimes work in its favor and other times against it. In the first quarter of 2024, Pemex had foreign exchange gains of over 33,000 million pesos. However, in the same period of 2025, foreign exchange losses amounted to just over 15,000 million pesos.
More concerning is the fact that Pemex’s financial cost increased by 21.5% between the first quarters of 2024 and 2025, while financial incomes dropped by 27.1%. This indicates the growing pressure on the company, reflected in its total debt level, which once again surpassed 2 trillion pesos (over 100,000 million dollars).
Debt Profile and Vulnerability
Regarding debt, it’s worth noting the profile of maturities: more than 27% of the total (561,000 million pesos) is due within less than a year, an increase of 32.1% compared to the first quarter of 2024.
However, financial debt is not the only factor stressing Pemex; supplier and contractor debt, though reduced since December 2024, is nearly 11% higher than in March 2024. These obligations affect not just Pemex but also small and large businesses that provide products and services to Pemex, whose operations are vital to the economic activity of several regions where the petroleum sector remains crucial.
Impact of Oil Prices and Reduced Demand
Two financial data points connect to operational aspects, relating to oil prices over which Pemex has no control. The average reference price of Mexico’s Export Mix (MME) was 72.6 USD per barrel in Q1 2024. For the same period in 2025, there was an 8.7% reduction, with the MME priced at 66.3 USD per barrel.
Worse news is the expectation of lower global economic growth, leading to reduced crude demand. Consequently, the MME price has dropped further: by April’s end, it stood at 55.8 USD per barrel. This could change drastically, but initially, Pemex’s April earnings are likely to have been even lower, and the current situation is unlikely to improve for the remainder of Q2.
Operational Challenges and Potential Positive Signs
Despite Pemex’s enormous difficulties, two operational data points from Q1 2025 caught my attention and hopefully signal a positive trend.
Reduced sales costs: While total revenue from sales decreased by 2.5%, sales costs dropped by 12.8%. Observing business segments, the cost of sold items fell by 34% in exploration and production and by 14% in transformative industry (refining primarily).
Petroleum product production reduction: The overall reduction was 9.2%, which isn’t necessarily bad if we consider that the transformative industry segment had been operating at a raw loss (where the cost of sold items exceeded sales revenue even before administrative expenses) for at least nine consecutive quarters and annual data since 2020.
More interesting is analyzing the composition of petroleum product production. While gasoline for automobiles fell by 2.8%, diesel dropped almost 25%. In Q1 2024, diesel made up 32% of total petroleum product production; this figure fell to 26% in the same period of 2025. This is a positive shift and potentially the only viable way to improve refinery operations, crucial for the entire company’s turnaround.
Pemex’s Significance and Future Prospects
Pemex is vital for Mexico’s inhabitants, both symbolically and materially in shaping modern Mexico and for the government’s ability to provide goods and services to the population. Pemex’s health also impacts fiscal and energy sustainability.
Although Pemex still poses a significant risk to public finances, there are paths for change, and it’s crucial to explore them urgently.
Key Questions and Answers
- What are the main issues facing Pemex in Q1 2025? Pemex is grappling with substantial financial pressures, including increased costs and reduced income, alongside operational challenges like decreased oil production.
- How have currency exchange risks affected Pemex? In Q1 2024, Pemex benefited from favorable currency exchange rates, but in Q1 2025, unfavorable rates led to losses.
- What is the current state of Pemex’s debt? Pemex’s total debt has surpassed 2 trillion pesos, with a significant portion maturing within less than a year. Additionally, supplier and contractor debt remains high.
- How have oil prices impacted Pemex’s performance? Oil prices have dropped, reducing both Pemex’s revenue and the expected global demand for crude.
- What positive signs are there in Pemex’s Q1 2025 performance? There are hints of positive trends in reduced sales costs and a potential shift towards more sustainable petroleum product production.
