MEXICO & OIL PRODUCTION

Impacts of Oil Production in Mexico

Impact of Oil Production in Mexico

Introduction

In today's world, one of the most valuable resources is oil because the industries, vehicles (on road, air and sea) and many other crucial types of equipment consume oil. The world has moved to the most advance level in the history of the mankind and the oil has played very important role in it. It is a fact that no country and no industry can work without oil. This has made the oil as a resource which made the country progressive. It has been seen that those countries which are rich in oil production has progressed to high extend in a very short period of time. Therefore, the impact of oil is enormous on the country's economy. The report will cover the impact of the oil production in the Mexico. The report will highlight the production of oil in Mexico, in house consumption and export of the world. The report will also focus on the impact of the oil production on the gross domestic production of the Mexico (Rourke & Connolly, 2003). Discussion

(Source:www. tradingeconomics. com).

The above mentioned graph showed the export of the Mexico. According to the data, the exports of Mexico have increased from USD 29,302 million in September of 2012 to USD 33,919 million till October, 2012. The data is reported by the most prestigious institute Institute Nacional de Estadística Geografía (Carr, et.al, 1996). The data analysis showed that exports of Mexico averaged at USD 10,460 million from 1980 until 2012. The highest level that the export achieved is USD 33,917 million during October, 2012 whereas the export touched the lowest level of USD 1,226 million during February, 1980. It showed that biggest exporter in Latin America is Mexico. The major exports of Mexico include oil, manufactured goods, oil products, fruits, silver, coffee, vegetables and cotton (Carr, et.al, 1996).

The economy of mexico majorly depends on the oil sector. The decline in oil prices during 2009, the country witnessed huge loses. The impact of the oil on the Mexico can better be understood by the following pie chart.

(Source: www. trading economics. com).

The chart shows that the export which are related to the fuel and minerals account for ten percent of the gross domestic product. The major portion is held by machinery and transport equipment which is around forty five percent. These goods are used to be produced in industries which relay on the oil. If the country is not producing oil then the industries which are dependent on the oil consumption become less productive because then the industries of the country has to import the oil for running the required operations and that is too costly for them. This is the universal fact that if the cost of the production is higher, then the price will also be higher which eventually lead to decline in the production because of low customers. The same fact is true for the production of all other ...