A clandestine maritime network is quietly reshaping Mexico’s illicit fuel economy. What began as simple pipeline theft has evolved into an industrial-scale enterprise powered by tanker shipments, shell companies and regulatory mis-classification. This operation, built in part by the Jalisco New Generation Cartel (CJNG), exposes deeper vulnerabilities in energy regulation, fiscal oversight and cross-border commerce.
The Operational Anatomy of the Tanker Enterprise
At the core of this smuggling scheme is the use of internationally chartered tankers transporting diesel shipments that are declared as lower-taxed products such as industrial lubricants. For example the Danish-flagged tanker Torm Agnes delivered approximately 120,000 barrels of Canadian diesel to Mexico’s Pacific port of Ensenada, but the cargo was documented as lubricants, exempting it from Mexico’s heavy diesel tax.
The logistics extend beyond the ship. A Houston-based company, Ikon Midstream, is reported to have purchased the diesel in Canada, chartered the tanker and arranged delivery to a Mexican firm alleged to be a front for the cartel. Once ashore, trucks bypass formal fuel-terminals and distribute the diesel through unlicensed stations or industrial clients, undercutting legitimate fuel companies by 5 %-10 %.
Scale and Strategic Implications
The annual value of illicit fuel imports into Mexico is now estimated at more than USD 20 billion and may account for up to one-third of the country’s diesel and gasoline market. The tax losses and market disruption are substantial: one estimate places revenue losses around USD 4 billion in 2024, with opposition parties arguing the figure could approach USD 10 billion.
What makes this evolution significant is the shift in modus operandi from traditional pipeline taps and localised theft to truly global logistics. CJNG’s deployment of maritime tanker shipments elevates fuel smuggling into the domain of commodity-trading and supply-chain management rather than simple local theft. This advancement challenges both energy governance and cross-border regulatory frameworks.
Regulatory, Enforcement and Policy Consequences
The existence of what some officials call a “dark fleet” of tankers smuggling fuel into Mexico underscores multiple policy frustrations. Firstly tracking and intercepting marine fuel shipments is structurally harder than domestic pipeline theft, because maritime cargoes can use shell-companies, false declarations and ambiguous ports of discharge. Secondly, the involvement of U.S. entities strengthens the case for greater cross-border regulatory coordination: U.S. sanctions were imposed on entities linked to CJNG’s fuel-smuggling network in May 2025.
Thirdly, for the legitimate energy sector the consequences are dire: a major international fuel retailer reportedly abandoned its Mexican business citing inability to compete with cartel-priced diesel entering the market illegally. Finally, this trend underscores how criminal groups are diversifying beyond narcotics and turning to energy-commodities as stable revenue streams, requiring policymakers to expand enforcement beyond traditional drug-trafficking models into the domains of maritime trade, customs and energy regulation.
A Final Note
What at first glance seemed a variation on fuel theft is in fact a sophisticated cartel-run enterprise using tanker networks, mis-declared cargoes and international logistics to carve out a major share of Mexico’s fuel market. The scale, method and implications demand a whole-of-system response spanning maritime regulation, customs enforcement and bilateral cooperation. The traditional fight against pipeline theft is no longer sufficient.
