Mexican drug cartels are extensively involved in stealing and smuggling crude oil and refined fuels (known as 

huachicol in Mexico) to fund their operations. This has become the most significant non-drug illicit revenue source for these criminal organizations, generating hundreds of millions to billions of dollars annually. 

How the Schemes Work

Cartels have developed sophisticated operations that mirror legitimate logistics networks, often involving bribery and violence to secure the cooperation of officials and oil workers. 

• Theft Methodology: Thieves (huachicoleros) illegally tap into pipelines owned by Mexico’s state oil company, Petróleos Mexicanos (Pemex), using precision and force. They also hijack tanker trucks and steal directly from refineries.
• Smuggling and Sale: The stolen oil and gas are moved through cartel-controlled territories and across borders.
  • Stolen crude oil is often smuggled into the U.S., mislabeled as “waste oil” or other hazardous materials to evade scrutiny, taxes, and regulations.
  • Complicit U.S. importers and brokers then purchase this stolen product at a steep discount and sell it on the legitimate U.S. and global energy markets, wiring illicit profits back to the cartels in Mexico.
• Domestic Market: Stolen fuel is also sold on the black market within Mexico, often at local gas stations or directly to drivers. 

Key Cartels Involved

Several major cartels are linked to fuel theft, with the Jalisco New Generation Cartel (CJNG) and the Santa Rosa de Lima Cartel (CSRL) being the most prominent. The revenue stream helps fund their violent territorial battles and other criminal activities, including fentanyl trafficking. 

U.S. Response

U.S. authorities have recognized the severity of the issue, with the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) and Office of Foreign Assets Control (OFAC) issuing alerts and sanctions against individuals and entities involved. Federal authorities in the U.S. have also brought criminal charges against individuals and companies in the U.S. involved in purchasing and reselling stolen Mexican oil. 

More information on the U.S. government’s efforts and specific risks can be found on the official U.S. Department of the Treasury website and in the FinCEN Alert on Oil Smuggling Schemes.