First it was guns. Then drugs, and people. Even El Chapo would approve of the latest criminal enterprise taking shape on the US’ southern border.
In a twist that gives new meaning to ‘free trade’ under the new NAFTA treaty (USMCA), Mexican drug cartels are diversifying their portfolios, with oil smuggling now ranking as their second-largest revenue stream after narcotics.
According to an alert from the US Treasury’s Financial Crimes Enforcement Network (FinCEN) on Thursday, cartels are stealing billions of dollars worth of crude oil from Mexico’s state-owned company, Pemex, and funnelling it into the US market through complicit brokers and small energy firms near the southwest border.
“In recent years, fuel theft in Mexico, including crude oil smuggling, has become the most significant non-drug illicit revenue source for the cartels,” it said.
The revenues are then used to sustain drug and human trafficking back into the US.
The Jalisco New Generation Cartel (CJNG), designated as a Foreign Terrorist Organization earlier this year, has been particularly active in this ‘black gold’ rush.
According to FinCEN and the FBI, their operations involve bribing Pemex employees, tapping pipelines and hijacking tanker trucks to siphon off fuel which is then mislabelled and sold in the US at discounted prices.
After crossing the border the stolen crude oil is delivered to vacant lots set up with mobile storage tanks that are operated by US companies under the control of Mexican brokers before it is finally delivered to complicit importers and sold on American and global energy markets.
It‘s made even more economically attractive given US president Donald Trump’s punitive 10% tariffs on energy from both Mexico and Canada.
The burgeoning oil trade has not gone unnoticed by the relevant American authorities.
On May 1, the Trump administration imposed sanctions on three Mexican nationals and two entities linked to CJNG’s fuel theft network. Treasury Secretary Scott Bessent emphasized the administration’s commitment to “using all available tools” to target such illicit activities — presumably the same ones being used to stop fentayl flowing from Canada under the guise of a national emergency.
The irony is palpable.
While the USMCA — or NAFTA 2.0 — aims to facilitate legitimate trade among North American countries, it appears to have inadvertently provided a framework that cartels are exploiting for their own gain.
As criminal organizations continue to innovate their revenue streams, the line between traditional smuggling and sophisticated trade manipulation becomes increasingly blurred.
In the meantime, US authorities are urging financial institutions to be vigilant for red flags associated with these oil smuggling operations, as outlined in FinCEN’s alert.
As cartels continue to adapt and expand their illicit enterprises, the challenge for law enforcement and regulatory bodies remains steep.