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Mexican electricity law temporarily suspended: Update

  • Market: Crude oil, Electricity, LPG, Metals, Natural gas, Oil products
  • 11/03/21

Adds recipient of injunction.

A court temporarily suspended Mexico's new electricity law yesterday, a day after it took effect, signaling the start of a wave of litigation against the controversial reform.

"While this interim relief was requested by one company, it will have general effect," stated a Mexico City court judgment yesterday.

Zuma Energia was awarded the first injunction in relation to its La Orejana solar park in Sonora, but Argus understands that developers EDF and Naturgy also secured injunctions against the law. More are expected tomorrow.

Zuma Energia, originally backed by UK private equity fund Actis and acquired last November by China's State Power Investment, is developing 816MW in wind and solar projects in Mexico.

Mexico's new electricity law was published in the official gazette on 9 March after a fast-tracked legislative process launched by President Andres Manuel Lopez Obrador on 1 February.

The law prioritizes dispatching CFE-generated power regardless of cost or environmental impact, revokes self-supply permits and begins a review process of all long-term power purchase agreements (PPAs) between CFE and independent power producers (IPPs).

The temporary suspension of the law was awarded "to guarantee the rights to competition and a free market," states the decision.

Some 40,924 MW, or 48pc, of Mexico's installed capacity is operated under private-sector generation permits that will all be affected by the reform, lawyers have said, predicting an avalanche of legal action under Mexican law and foreign trade agreements.

The law will impact up to $39bn of investments in the renewable energy sector alone, Mexican wind and solar associations Amdee and Asolmex said.

Lopez Obrador's government has passed a flurry of regulatory changes over the past two years that have sought to strengthen CFE's market position despite the 2014 energy reform that called for an even playing field among market participants. But the courts have largely sided with private company legal action over the changes and the supreme court recently set aside the government's electricity policy because it contravened the constitutional right to free competition.

The government has two days to appeal the judgment.


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04/04/25

IMF says tariffs a significant risk to growth: Update

IMF says tariffs a significant risk to growth: Update

Updates Brent price in paragraph 4, adds PVM comment in paragraphs 5-6, Morgan Stanley in paragraph 10 London, 4 April (Argus) — US import tariffs pose a "significant risk" to the global economy, according to the IMF. "We are still assessing the macroeconomic implications of the announced tariff measures, but they clearly represent a significant risk to the global outlook at a time of sluggish growth," IMF managing director Kristalina Georgieva said. "It is important to avoid steps that could further harm the world economy." The comments came after two days of turmoil on global oil and equities markets, sparked by the US imposition of sweeping tariffs on trade. For oil markets, this was compounded by a surprise decision from the Opec+ producer group to speed up the unwinding of its output cuts. Front-month Ice Brent crude futures prices fell earlier today to a 3.5 year low of $67.48/bl, down by more than 10pc since US President Donald Trump released details of the tariffs on 2 April. Analysts at brokerage PVM described the timing of this as "frankly amazing" and said it was "the icing to this global bearish cake". "The market is now reckoning on the cork being out of the production bottle and believes, as we do, that it will not be pushed back in," PVM said. US-based bank Goldman Sachs today said it has cut its oil demand growth estimate for this year to 600,000 b/d from 900,000 b/d, based on its economists' new view of economic growth. This and the extra production from Opec+ has led the bank, which was bullish on oil prices for a long time, to cut its Brent crude price forecasts for a second time in three weeks , by $5/bl to $66/bl this year. Goldman also removed a price range from its forecasts, "because price volatility is likely to stay elevated on higher recession risk." Like Goldman, UK-based bank Barclays said there is downside risk to its $74/bl forecast for Brent this year. It said oil demand is holding up, "but the potential effect of the trade war on demand is hard to ignore." Analysts at US-based bank Morgan Stanley said a recession is a realistic outcome of the tariffs decision, although not its base case. Modelled against previous recessions, the bank said there is a risk of oil demand growth falling to zero, compared with its forecast of 900,000 b/d for this year. On supply, it noted that an Opec quota increase "is not the same as an actual production increase", and said it would wait for additional clarity before reassessing its second-half 2025 Brent price forecast of $67.5/bl. By Ben Winkley Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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US tariffs a significant risk to global economy: IMF


04/04/25
News
04/04/25

US tariffs a significant risk to global economy: IMF

London, 4 April (Argus) — US import tariffs pose a "significant risk" to the global economy, according to the IMF. "We are still assessing the macroeconomic implications of the announced tariff measures, but they clearly represent a significant risk to the global outlook at a time of sluggish growth," IMF managing director Kristalina Georgieva said. "It is important to avoid steps that could further harm the world economy." The comment come after two days of turmoil on global oil and equities markets, sparked by the US imposition of sweeping tariffs on trade. For oil markets, this was compounded by a surprise decision from the Opec+ producer group to speed the unwinding of its output cuts. Front-month Ice Brent crude futures prices have fallen by more than 8pc since US president Donald Trump released details of the tariffs on 2 April, to trade near a three-year low below $69/bl. US-based bank Goldman Sachs on 4 April said it has cut its oil demand growth estimate for this year to 600,000 b/d from 900,000 b/d, based on its economists' new view of economic growth. This and the extra production from Opec+ has led the bank, which was bullish on oil prices for a long time, to cut its Brent crude price forecasts for a second time in three weeks , by $5/bl to $66/bl this year. Goldman also removed a price range from its forecasts, "because price volatility is likely to stay elevated on higher recession risk." Like Goldman, UK-based bank Barclays said there is downside risk to its $74/bl forecast for Brent this year. It said oil demand is holding up, "but the potential effect of the trade war on demand is hard to ignore." By Ben Winkley Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Funding cuts could delay US river lock renovations


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03/04/25

Funding cuts could delay US river lock renovations

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Mexico, Canada sidestep latest Trump tariffs: Update


03/04/25
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03/04/25

Mexico, Canada sidestep latest Trump tariffs: Update

Adds Canada reaction Mexico City, 3 April (Argus) — US president Donald Trump's sweeping tariff measures largely spared Mexico and Canada from additional penalties, as the US-Mexico-Canada free trade agreement (USMCA) will continue to exempt most commerce, including Mexico's energy exports. According to Trump's tariff announcement on Wednesday , all foreign imports into the US will be subject to a minimum 10pc tax starting on 5 April, with levels as high as 34pc for China and 20pc for the EU. Mexico and Canada are the US' closest trading partners and have seen tariffs imposed and then postponed several times this year, but remained mostly exempt from Trump's "reciprocal" tariffs. Energy and "certain minerals that are not available in the US" imported from all other countries also will be exempt from the tariffs. Trump also did not reimpose punitive tariffs on energy and other imports from Canada and Mexico. All products covered by the USMCA, which include energy commodities, are exempt as well. Yet steel and aluminum, cars, trucks and auto parts from Mexico and Canada remain subject to separate tariffs. Steel and aluminum imports are subject to 25pc, in effect since 12 March. The 25pc tariff on all imported cars and trucks will go into effect on Thursday, whereas a 25pc tax on auto parts will go into effect on 3 May. Mexico's president Claudia Sheinbaum this morning emphasized the "good relationship" and "mutual respect" between Mexico and the US, which she said was key to Trump's decision to prioritize the USMCA over potential further tariffs on Mexican imports. "So far, we have managed to reach a relatively more privileged position when it comes to these tariffs," Sheinbaum said. "Many of our industries are now exempt from tariffs. We aim to reach a better position regarding steel, aluminum and auto parts exports, too." The Mexican peso strengthened by 1.5pc against the US dollar in the wake of the tariff announcement, to Ps19.96/$1 by late morning on Thursday from Ps20.25/$1 on Wednesday. Mexico has not placed any tariffs on imports from the US, which may have eliminated the need for the US to reciprocate with tariffs. "In contrast to what will apply to 185 global economies, Mexico remains exempt from reciprocal tariffs," Mexico's economy minister Marcelo Ebrard said. Mexico exported 500,000 b/d of crude to the US last year, making the US by far the most important export market for the nation's commodity. Mexico also imports the majority of its motor fuels and LPG from the US. If US won't lead, Canada will: Carney To the north, Canada's prime minister says the US' latest trade actions will "rupture" the global economy. "The global economy is fundamentally different today than it was yesterday," said prime minister Mark Carney on Thursday while announcing retaliatory tariffs on auto imports from the US. Canada is matching the US with 25pc tariffs on all vehicles imported from the US that are not compliant with the USMCA, referred to as CUSMA in Canada. But unlike the US tariffs, which took effect Thursday, Canada's will not include auto parts. Automaker Stellantis has informed Unifor Local 444 that it is shutting down the Windsor Assembly Plant in Ontario for two weeks starting on 7 April, with the primary driver being Trump's tariffs. The closure will affect 3,600 workers. Trump on 2 April unveiled a chart of dozens of countries the US is targeting with new tariffs, but that lengthy list may also represent opportunity for Canada and Mexico, who have already been dealing with US trade action. "The world is waking up today to a reality that Canada has been living with for months," Canadian Chamber of Commerce president Candace Laing said, a reality which Carney views as an opportunity for his country. "Canada is ready to take a leadership role in building a coalition of like-minded countries who share our values," said Carney. "If the United States no longer wants to lead, Canada will." By Cas Biekmann and Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Stellantis idles plants, lays off 900 on US tariffs


03/04/25
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03/04/25

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