Economic analysis of the oil trade between Mexico and the United States

Abstract

Oil trade relations between the United States and Mexico originated over two centuries ago and although at times the relationship has been extremely volatile, it remains an important relationship. In order to understand the evolution of the crude oil and petroleum trade, one must return to the beginning and track the history of trade policy between the two countries. The economic and national relationship between Mexico and the United States is important simply due to logistics and the great amount of trade that takes place. The oil sector in Mexico accounts for the majority of the country's national income and beyond that, produces a picture of the future, specifically the development of the world's energy reserves and future oil dependence. One concern that remains for potential investors and partners is the uncertainty that surrounds the political environment in Mexico. Along with the uncertainty surrounding the future of the oil industry comes ambiguity in the future of relations between Mexico and the United States, which could come full-circle and affect the oil industry again. Through this paper, I attempt to trace the history of trade relations between the United States and Mexico in order to paint a picture of what the future may be in regards to oil and trade between the two countries.