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“The White House itself has limited options in what it can actually do,”said Krista Kuhl, a Houston-based oil consultant with FGE. Since the creation of the SPR, only three emergency releases have been made in almost 50 years.
The majority of U.S. petroleum exports to Latin America go to the United States. Brazil saw 139,000 barrels of gasoline shipped daily by refiners, which is the largest volume ever recorded since 1945. Mexico, America’s biggest foreign buyer of gasoline, still hasn’t recovered to pre-Covid levels but should in the next two years as its economy bounces back from the pandemic.
Pain at the pump isn’t just a U.S. problem. Prices south of the border are also high because the U.S. dollar is so strong that it’s making imports more expensive. Brazil’s gasoline prices rose by 46% last year, making them the most expensive in all data since 2013.
The pull from Latin America is expected to remain strong despite the uneven post-pandemic recovery in the region, says Felipe Perez, a strategist at IHS Markit Ltd. Brazil, he says, is recovering faster than Mexico due to a “sizable” stimulus package. Brazil’s gas demand is predicted to rise to 2019 levels by the end of 2019, ahead of the Southern Hemisphere summer.
Mexico, which was experiencing an economic slowdown before the pandemic hit- and didn’t enact a stimulus package- should return to 2019 levels only at the end of 2023, Perez said. Mexico continues to be the top foreign buyer for U.S. gas despite this slowdown.
