Mexico’s state-run Petroleos Mexicanos would likely reduce oil sales to Europe and Asia before the United States, its main market for oil exports, after its Dos Bocas refinery begins operations, a Valero Energy Corp executive said on Thursday.

Pemex PEMX.UL in December said its crude exports will fall to 435,000 bpd this year from 1.019 million bpd in 2021 and it plans to cease all crude exports after its 300,000-barrel-per-day Dos Bocas refinery in the southeastern state of Tabasco begins processing crude next year.

Pemex was not immediately available to respond to the Valero executive’s comments.

Analysts expect that the exports decline – which has not yet been included in the budget Mexico’s congress approved for 2022 – would primarily affect customers that buy Mexican crude on the spot market, including many in Asia.

“It looks like their (Pemex) goals are pretty aggressive,” said Gary Simmons, Valero’s chief commercial officer, during the firm’s fourth quarter earnings call on Thursday.

The Texas-based refining company, which is among the U.S. top importers of heavy crude, expects to continue its business relationship with Pemex, he added.

“Our experience has been that as they increase refinery runs in Mexico, they increase the export of high-sulfur fuel oil, and that’s a good feedstock for our high complexity U.S. Gulf Coast (refinery) system,” he said.

Pemex also plans to reshuffle fuel imports after buying Shell’s 50%-stake in the Deer Park refinery in Texas, which will give it access to up to 230,000 bpd of U.S. fuels.
Source: Reuters (Reporting by Erwin Seba and Marianna Parraga; Editing by Alexandra Hudson)