Mexico’s regional oil giant Pemex could not be downgraded by Moody’s despite the agency downgrading Mexico’s sovereign rating to one notch above junk status.
However, the confirmation of Pemex’s ratings hides the difficulties of the heavily indebted Mexican oil company, which has failed to deliver profits as oil prices have risen to more than $100 in recent months.
Moody’s ratings on Friday affirmed the ‘ca’ sovereign credit rating of Petroleos Mexicanos, as Pemex is officially known, and a B1 Corporate Family Rating (CFR).
The outlook remains stable, meaning that the rating agency currently does not expect to downgrade Pemex in the next 12 to 18 months.
Despite the downgrade of Mexico’s sovereign rating to Baa3 from Baa2 and the subsequent wave of downgrades at major banks, Moody’s has kept its rating on Pemex unchanged with a “stable” outlook.
That’s because the rating agency expects that “the Government of Mexico will continue to provide the highest and most timely support to the company, as clearly shown in 2025 and anchored in our forward-looking thinking under the current administration,” said Roxana Muñoz, Vice President – Chief Credit Officer at Moody’s Ratings.
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But the authority noted that “PEMEX’s credit profile remains constrained by ongoing operational challenges, which continue to result in negative free cash flow and significant financing needs.”
Pemex is struggling to reverse a multi-year decline in oil and gas production while trying not to incur more debt on top of an already large debt pile.
In fact, Pemex’s debt fell in the first quarter to its lowest level in more than a decade—but at $80 billion, the debt is still huge.
Due to the payment of debts of $ 16.5 billion per quarter, Pemex posted its third consecutive quarterly loss in the first half of 2026, despite the increase in oil prices in March driven by the war in Iran.
A heavy debt burden and debt obligations this year have prevented Pemex from benefiting from a 40% rise in oil prices in recent months.
The company has had to deal with internal strife and a major oil spill earlier this year.
Earlier this month, Mexican President Claudia Sheinbaum announced that Pemex’s CEO, Víctor Rodríguez, would step down and the country’s oil company’s chief financial officer, Juan Carlos Carpio, would replace Rodríguez in the top job.
