US Treasury Sanctions Mexican Cartel Over Fuel Theft

Fuel theft, including the smuggling of crude oil, is the ’most significant non-drug revenue source' for Mexican cartels, Treasury said.

A tanker truck from Mexico's oil company, PEMEX, enters a refinery to load up on fuel in Tula, Hidalgo State, Mexico, on Jan. 11, 2018. Pedro Pardo/AFP via Getty Images

The Department of the Treasury’s Office of Foreign Assets Control sanctioned the Cartel de Santa Rosa de Lima (CSRL), a Mexican cartel that derives most of its illicit revenue from oil and fuel theft operations, the Treasury said in a statement on Dec. 17.

The department said CSRL’s fuel theft operation is based in the central Mexican state of Guanajuato.

“The violent conflict between CSRL and the notorious Mexican terrorist Cartel Jalisco Nuevo Generacion (CJNG) for control of fuel and oil in Guanajuato has made the state one of the deadliest in Mexico,” the department said.

“CSRL’s activities also help enable a cross-border energy black market, undermine legitimate U.S. oil and natural gas companies, and deprive the Mexican government of critical revenue.”

The U.S. State Department in February designated Cartel Jalisco Nuevo Generacion (CJNG) as a Foreign Terrorist Organization and a Specially Designated Global Terrorist.

According to the Treasury, fuel theft, including the smuggling of crude oil, is the “most significant non-drug revenue source” for Mexican cartels.

Criminals steal fuel from Petróleos Mexicanos (Pemex), Mexico’s state-owned energy company, through various means, including bribing company employees, illegally tapping into pipelines, hijacking tanker trucks, and threatening Pemex workers, the Treasury said.

The stolen fuel is then sold on the black market in Mexico, Central America, and the United States.

“President Trump made a promise to pursue the total elimination of drug cartels to protect the American people,” Treasury Secretary Scott Bessent said.

“At my direction, the Treasury Department is aggressively cutting these criminals off from the U.S. financial system. No matter where or how the cartels are making and laundering money, we will find it, and we will stop it.”

According to a Dec. 16 report by the research organization InSight Crime, fuel theft in Mexico is driven by high fuel levies in the country.

Mexican authorities charge a levy called the Special Tax on Production and Services that accounts for about 40 percent of fuel costs in the country.

While this levy acts as a stabilizer for pump prices and generates revenue for the government, it also ends up creating a lucrative opportunity for criminal groups to steal the fuel and sell it at lower prices, according to the report.

Fuel Trafficking in US

In the United States, the stolen crude oil is smuggled by mislabeling it as “waste oil” or hazardous materials to avoid official scrutiny and evade regulations and taxes, according to the Treasury. It is delivered to American importers operating in the sector near the southwest border.

American importers sell the stolen fuel at steep discounts in the United States and international energy markets, eventually sending significant profits back to cartels in Mexico.

“Through these schemes, Mexican cartels steal billions of dollars from Pemex, fuel rampant violence and corruption across Mexico, and undercut legitimate oil and natural gas companies in the United States,” the Treasury said.

The turf war between CSRL and CJNG has resulted in an uptick of homicides in Guanajuato. To counter CJNG, CSRL has allied with other cartels and recruited ex-Colombian military and paramilitary personnel, according to the department.

In addition to fuel theft, CSRL engages in the trafficking of narcotics, including transporting heroin into the United States.

Along with CSRL, the Treasury has sanctioned the group’s leader, José Antonio Yépez Ortiz. He was arrested in Mexico in 2020 and sentenced to 60 years in prison in 2022 but continues to be active from inside the prison.

The Treasury sanctions follow a Dec. 11 meeting of the U.S.–Mexico Security Implementation Group.

During the meeting, the two sides agreed to deepen and streamline collaboration on various criminal matters, including fuel theft investigations.

In May, the Treasury announced sanctions on three individuals and two transport companies from Mexico for allegedly feeding CJNG’s fentanyl business and financing the cartel via fuel theft.

At the time, Bessent said fuel theft and crude oil smuggling were “cash cows” for CJNG’s narcotics operations, providing funds to the cartel that allow it to wreak havoc in both the United States and Mexico.

Paul Anthony Perez, president of the National Border Patrol Council, said in a previous statement that blocking CJNG’s finances will have a “devastating and crippling effect” on its ability to operate in the United States.