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Exchange rate effect and prices would decrease oil revenues, even with a larger production

Published on Thursday, November 19, 2020 | Updated on Monday, February 8, 2021

Exchange rate effect and prices would decrease oil revenues, even with a larger production

The dynamics of nominal GDP (in USD) from oil mining are closely related to the oil revenues of the federal government. In Mexico, as a price-taker in the international market, such dynamics are determined by the evolution of oil prices, the volume of production and the exchange rate.

Key points

  • Key points:
  • International prices, the exchange rate and the volume of crude oil production determine the dynamics of nominal GDP in USD of the oil mining subsector in Mexico.
  • A higher volume of production does not guarantee an increase in the oil revenues of the federal government.

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