US Department of Commerce has granted approval for limited crude oil trading with Mexico, lifting a four decade long ban.
The department intends to allow state-owned Petroleos Mexicanos (Pemex) to deliver heavy Mexican crude oil in return of up to 100,000 barrels a day of light crude and condensate from the US.
Pemex is likely to receive the federal permits by the end of this month.
Bloomberg cited Pemex as saying: “With light crude coming from the US, the country will benefit given that Pemex will mix light and heavy crudes which will result in a greater production of gasolines and diesel.
“In addition, less fuel oil will be produced and higher-quality fuels will benefit the environment.”
“I believe it will open the door for more reforms that move North America towards energy independence.”
The decision is going to benefit Mexico, which generates heavy crude but has its refineries designed to process the lighter version of the fuel.
Last year, the Government of Mexico had initiated reforms which allow refiners in the country to import oil in order to boost production.
The step will boost the energy industry in the US as well.
Congressman Henry Roberto Cuellar said: “These swaps will further positively impact energy exploration in Texas and the United States.”
US Representative Will Hurd said: “An agreement like this is a strong step toward North American energy security, which is an integral part of our National Security.
“I believe it will open the door for more reforms that move North America towards energy independence.
“The American Energy Renaissance that has flourished in Texas due to Eagle Ford, Permian Basin and Barnett shale exploration will continue to strengthen because of this decision.”