Pemex’s bonds have tumbled into junk status after downgrades by major ratings agencies, including a thumbs-down from Moody’s this month. Then came the coronavirus and the worldwide collapse in oil prices, with futures trading in negative territory. Instead of boosting Mexico’s growth, Pemex could become a crushing financial burden for a nation that was already facing its worst recession in decades. “Everyone knows [López Obrador] will not let Pemex go under,” said Francisco Monaldi, a professor of energy economics at Rice University in Houston. “He will drag the Mexican government down with Pemex.”
Mexican officials say they believe the economic damage to Pemex — and the government — can be contained. In normal times, Pemex produces at least 15 percent of the government’s annual revenue. Authorities say they have shielded those tax payments through a complex hedging operation that will allow them to sell some Mexican oil at $49 a barrel — rather the $8.50 it fetched last week. And López Obrador says Mexico will ride out the price decline by turning more of its oil into gasoline in domestic refineries. But oil analysts, ratings agencies and academics say the company’s outlook remains dire, as the coronavirus pandemic dries up global demand for oil. “At some point there comes a reckoning, and I think it comes this year,” said David Shields, an oil consultant in Mexico City.