Mexico's Pemex declares force majeure on fuel imports from trading arm: sources

[MEXICO CITY] Mexico's state oil company Pemex has declared force majeure over fuel supplies from its trading arm PMI Comercio Internacional, two sources with knowledge of the decision told Reuters on Thursday.

One of the sources said PMI had yet to declare force majeure on fuel bought from its own suppliers but would be likely to do so soon. The source added that the trading arm was still evaluating how to implement the declaration.

Pemex and PMI did not immediately respond to requests for comment.

Many gasoline and diesel buyers around the world have declared force majeure as demand for motor fuels has nose-dived in recent weeks due to coronavirus-related restrictions, and available storage is quickly filling up.

A bottleneck of tankers waiting to discharge gasoline and other refined product imports bought by PMI on behalf of Pemex has grown in recent days, according to Refinitiv Eikon data.

The bottleneck is especially pronounced at Pemex's Tuxpan and Coatzacoalcos ports, according to the data.

A declaration of force majeure is a legal defense that refers to unexpected external circumstances that prevent a party to a contract from meeting their obligations due to unforeseeable circumstances.

Such a declaration can allow a party to a contract to avoid liability for nonperformance.

REUTERS