The price of Maya crude oil has reached $110 per barrel, more than double the estimate by Mexico's Ministry of Finance for this year of $54.9 per barrel. This scenario is risky for the Mexican government on several fronts: fiscal, energy supply, and higher inflation. Global uncertainty over the direction of the conflict in the Middle East has the economic team of Claudia Sheinbaum on alert, although for now, they are assessing a resolution that will not last more than a month and will contain fiscal and inflationary impacts. According to sources from the Ministry of Finance, after the outbreak of war in Iran and its impact on the energy market (with crude prices rising more than 6%), Edgar Amador and Altagracia Gómez have held dialogues with Scott Bessent, head of the U.S. Treasury, to evaluate the conflict's scenarios. Following these talks, the Secretary of Finance believes the war will last a maximum of four weeks, time for a political realignment in Iran, assuming no attacks on strategic oil facilities or disruptions to the Strait of Hormuz, thus contained impacts on crude prices. Furthermore, the analysis considers that Trump will want to avoid high gasoline prices before the mid-term elections where the Republican Party could be compromised. The global volatility from the war in Iran is dragging down the peso and the stock market. In the market, they note that the worst-case scenarios from recent geopolitical conflicts have not materialized. President Claudia Sheinbaum has already said that the IEPS stimulus for gasoline will be activated if crude prices advance more abruptly to avoid increases in fuel prices. However, activating this fiscal stimulus is not an easy decision for the head of the country's public finances, as it will mean less revenue for the public treasury in a year of weak economic growth and fiscal consolidation goals that keep the rating agencies' attention. There are also risks in the supply of natural gas: in a scenario with greater energy pressures, it is estimated that the United States will seek to prioritize its exports by sea, leaving its pipeline exports—to which Mexico has access—as secondary in the hierarchy, affecting the country due to its high dependence on U.S. hydrocarbons. And if the geopolitical conflict worsens, the options are limited. A statement from Bob McNally, president of Rapidan Energy Group, highlights this idea by stating: "We have had seven years of 'the boy who cried wolf' since the Houthis, Iran's allies, attacked Abqaiq." Rating agency Moody's also estimated as the base scenario that the conflict will be relatively brief—a matter of weeks—and that navigation through the Strait of Hormuz will resume on a large scale: "This scenario probably will not generate a significant credit impact on the issuers we rate." Meanwhile, the current scenario favors the rise of benchmark crude prices, which on this Tuesday show advances of more than 6% to $75.96 per barrel for WTI, while Brent stood at $82.77 per barrel this day. Risks for Mexico. The point of tension revolves around Trump's pressure for a regime change and, therefore, the response Iran might have: while it cannot physically close the Strait of Hormuz, it can generate disruptions to oil passage, as it has already done through attacks on tankers and threats. According to estimates, in the scenario where Iran causes significant damage to oil facilities or greater disruptions in the Hormuz passage, it would cause crude prices to rise to around $130 per barrel. According to estimates from the International Energy Agency, only 4.2 million barrels per day of regional pipeline capacity are available. Amador is analyzing activating the IEPS stimulus amid oil pressures from attacks in Iran. On the other hand, although OPEC agreed to increase production by 206,000 barrels starting in April, experts warn that the result could be lower due to a lack of actual production capacity. In the short term, the existence of oil stored outside the Gulf, even in oil tankers at sea that departed before the attacks, offers a cushion similar to the one used after the 2019 attack on Saudi oil facilities, which helped avoid major export losses at that time.
