Multiple Mexican criminal organizations are smuggling stolen crude oil into Texas as part of a sophisticated black-market operation, according to the Drug Enforcement Administration (DEA).
Why It Matters
President Donald Trump signed an executive order designating Mexican drug cartels and other Latin American groups as terrorist organizations.
Trump’s order says that these groups “threaten the safety of the American people, the security of the United States, and the stability of the international order in the Western Hemisphere.”
Trump has previously suggested that U.S. troops might be deployed into Mexico to combat the powerful drug cartels and crime lords—a move firmly opposed by Mexico’s leadership.
What To Know
Two prominent Mexican drug cartels—the Jalisco New Generation cartel (CJNG) and the Gulf cartel—have expanded their operations to include crude oil theft and the extortion of U.S. mining companies, say federal officials who describe the potential alliance as a “super cartel.”
These groups are stealing the crude from Mexico’s state-owned oil company Petróleos Mexicanos (Pemex), according to the DEA’s 2025 National Drug Threat Assessment report. The stolen oil is then smuggled across the U.S.-Mexico border into Texas, where it is sold on the black market, sometimes through a trade-based money laundering scheme involving U.S. oil and gas companies.
Authorities say this illicit petroleum smuggling has become a primary funding source for the transnational criminal organizations, which also include the Sinaloa cartel.
The report estimates Mexico loses tens of billions of dollars in tax revenue annually due to fuel theft, Pemex alone reporting losses of 20.53 billion pesos ($1.05 billion) in 2024—a 10 percent increase from the previous year. U.S. oil and gas companies also face financial losses from disruptions in petroleum imports and exports.
On May 1, 2025, the U.S. Treasury Department sanctioned three Mexican nationals and two Mexico-based entities tied to the CJNG’s drug trafficking and oil smuggling network, freezing their U.S.-based assets and prohibiting Americans from engaging with them.
What People Are Saying
DEA Acting Administrator Robert Murphy said: “DEA and our federal, state, and local law enforcement partners must continue to adapt and work together to attack global drug trafficking organizations at every level. By joining forces to reduce supply and demand, we can destroy the drug trafficking networks and achieve a safer and healthier future for all Americans.”
What Happens Next
Federal officials said the designations mark a significant step in dismantling one of the largest funding streams used by drug cartels. The investigation will focus on U.S. companies and individuals suspected of enabling or benefiting from the illegal petroleum trade.
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