The conflict between the United States, Israel, and Iran is no longer a distant phenomenon for Mexico and has begun to directly impact its economy, energy security, and internal stability, in a scenario where experts warn that the country faces a structural vulnerability to international shocks.
‘It drives up fuel prices and puts pressure on food prices’
The impact of the conflict between the United States and Iran is already beginning to affect the Mexican economy beyond fuel and threatens to spread to basic goods, in a chain reaction that could put pressure on inflation if international tensions persist.
“If the war continues, there will be price increases for other products,” warns economist Luis de la Calle, noting that the energy price increase will not be limited to gasoline and diesel, but will also impact key inputs for production.
Among the most exposed sectors are those linked to natural gas, such as fertilizers, ammonia, and urea, which could translate into direct pressure on agriculture and food production.
The specialist explains that these inputs are fundamental to agricultural activity and that their increased cost is quickly reflected in production costs, which are eventually passed on to the consumer.
Although the increase in oil prices generates higher revenues for the federal government, the effect on the domestic economy is adverse, due to Mexico’s dependence on imported fuels.
“The net impact is positive for public finances, but negative for the Mexican economy,” he maintains.
He indicates that Mexico produces oil, but imports a significant proportion of gasoline, diesel, and natural gas derivatives, which makes it particularly vulnerable to external shocks such as the current conflict in the Middle East.
This dependence means that any increase in international prices is reflected almost immediately in domestic costs, especially in strategic sectors such as transportation, industry, and agricultural production.
In the short term, the government has attempted to contain the impact through fiscal incentives such as the reduction of the IEPS (Special Tax on Production and Services), with the aim of mitigating the rise in fuel prices. However, De la Calle warns that these measures have a limited scope.
If the conflict continues, the rising cost of energy inputs will begin to impact other production chains, particularly those that depend on natural gas as a raw material.
The effect could be gradual but cumulative: first in industrial costs, then in food, and finally in overall inflation.
Despite this scenario, the economist points out that Mexico maintains a relative advantage over other regions due to its proximity to the United States, where natural gas prices are lower than in Asia or Europe.
However, he warns that this advantage does not eliminate internal risks.
“The main risk is failing to recognize the opportunity,” he says, arguing that the country must take advantage of this situation to strengthen its energy sector and reduce its dependence on imports.
Otherwise, Mexico will remain exposed to a phenomenon that has already begun to manifest itself, primarily in price increases for basic goods.
He warns that passing on these costs not only affects producers but permeates the entire value chain. For example, the increase in fertilizers and natural gas derivatives impacts everything from planting to distribution, raising prices at wholesale markets and retail outlets.
Furthermore, the rising cost of diesel intensifies the inflationary effect.
This, he recalls, is because more than 80 percent of cargo in Mexico is transported by road, making fuel a critical factor for price stability.
In this context, sectors such as transportation, manufacturing, and retail are beginning to feel the impact simultaneously, generating pressures that could intensify if the conflict extends for weeks or months.
De la Calle warns that the government faces a dilemma: maintain fiscal stimulus to contain prices or preserve public revenue.
The reduction in the IEPS (Special Tax on Production and Services) helps cushion the impact in the short term, but it implies fewer resources for the State.
This scenario, he says, forces a rethinking of the country’s energy strategy.
Relying solely on crude oil exports without strengthening refining and petrochemical capacity leaves Mexico exposed to international volatility.
“Mexico must reduce its dependence on imports and strengthen its productive capacity,” he argues, insisting that the current context is a warning sign to accelerate structural changes.
If this is not done, he adds, the country will continue to face a recurring pattern: every international crisis translates into internal pressures on prices, production, and consumption.
Risks of inflation and security
The conflict between the United States, Israel, and Iran is not only driving up fuel prices, but has become a systemic risk for Mexico, with effects that reach the economy, national security, and social stability, warns security expert Eduardo Vázquez.
From a strategic perspective, he explains, the tension in key routes such as the Strait of Hormuz—through which more than 20 percent of the world’s oil passes—has an immediate impact on global supply and, therefore, on international crude oil prices.
The problem for Mexico, he says, is not the conflict itself, but the combination of this event with the country’s structural weaknesses, particularly its dependence on imported refined fuels.
“Mexico is an oil producer, but it depends on imported gasoline and diesel, which makes it vulnerable,” he points out.
This asymmetry means that any rise in international prices is immediately reflected in the domestic market. The impact is especially critical in the case of diesel, which, beyond being a fuel, functions as a linchpin of the national economy.
“Diesel is a driving force of the economy: it moves goods, sustains supply chains, and enables industrial operations,” he explains.
More than 60 percent of cargo in Mexico is transported by road, creating a direct dependence on this input. Its increased price raises logistics costs, puts pressure on the distribution of food and essential goods, and ultimately translates into inflation.
The expert warns that this phenomenon can quickly escalate into a national security problem, generating social tensions stemming from the loss of purchasing power and the increase in the prices of basic goods.
“The longer the conflict lasts, the greater the likelihood of ripple effects in different sectors,” he cautions.
He adds that the impact is not uniform. In the first phase, it affects transportation and logistics; This subsequently affects industry, commerce, and ultimately, food production. Basic products like tortillas, eggs, milk, and chicken could become more expensive due to increased production and distribution costs.
Added to this is the impact on public transportation and urban mobility, where diesel consumption is high. The increased costs could lead to fare adjustments or greater subsidies, with social and fiscal consequences.
The government has resorted to the Special Tax on Production and Services (IEPS) as a containment mechanism to prevent abrupt increases in fuel prices; however, Vázquez warns that this instrument has limitations and generates social pressure.
Source: reforma
