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The Secret Weapon Giving Mexico Power in the Oil-Price War

  • Mexico’s hedge strengthens its hand as negotiations drag on
  • The option could hand Mexico a multi-billion dollar payout
McDermott International Presents Completion Of ABkatun-A2 Oil Platform As Pemex Expected To Start Operations In April
Photographer: Luis Antonio Rojas/Bloomberg
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As Mexico and Saudi Arabia fight over a deal to bring the oil-price war to an end, Mexico has a powerful defense: a massive Wall Street hedge shielding it from low prices.

With talks well into their third day, the Mexican sovereign oil hedge, which insures the Latin American country against low prices and is considered a state secret, is a factor that may make the country less inclined to accept the OPEC+ agreement.