Sectors

Regions

Sections

Forecasts & Analysis

Market commentary

Reference & Archive

Supply & Demand

Uncle Sam wins in Mexico’s standoff with Peru

There is nothing like a supply risk to find out who your friends are, as Mexico has learned in recent months There is nothing like a supply risk to find out who your friends are, as Mexico has learned in recent months.
By Chris Noon 21 February 2017 0 24078
Manzanillo LNG terminal, Mexico. The Panama Canal allows large vessels to reach it from the US. (Samsung C&T)

“Poor Mexico – so far from God, so close to the United States,” lamented Mexico’s long-serving 19th Century President Porfirio Diaz. However, there are times when Mexico should be grateful for its proximity to Uncle Sam.

An LNG pricing dispute between Peru, Mexico and Shell has left Peru and the supermajor seeking higher-priced markets elsewhere. Mexico has not imported a Peruvian LNG cargo since 21 October 2016.

The US has filled the Peru-shaped hole. Mexico has been the largest customer...