The disputed origins of a Gulf of Mexico oil spill. And how Argentina overturned a historic lawsuit over the nationalization of YPF.
Ignacio Portes & Jorge C. Carrasco
ENVIRONMENT
A mysterious oil leak in the Gulf of Mexico
An oil slick has been spreading quietly across the Gulf of Mexico over the last month, but the disaster only made headlines last week, when satellite images, fishermen’s testimonies and environmental reports converged into a bleak picture that could no longer be ignored.
According to estimates from Mexico, the spill stretches across more than 600 kilometers of the Veracruz and Tabasco coastlines, and has polluted over 200 kilometers of beaches. Environmental groups warn that it has reached protected reef areas, disrupted local fishing economies and threatened marine species living along the coast.
👉 Why it matters. Beyond the environmental damage, the mystery around the spill has become a political affair, as public authorities, opposition figures and private sector leaders expound competing theories about its origin, in a country whose energy sector is showing increasing signs of decay.
The federal government has leaned towards two hypotheses, both of which would exonerate officials from blame:
- The slick could have been caused by natural oil seeps known in Mexico as chapopoteras, orÂ
- A private vessel that discharged oil without authorization while crossing the region.
A well-known phenomenon, particularly in the Gulf of Mexico, chapopoteras are naturally occurring pockets of petroleum that seep from the seafloor, rise under pressure and eventually reach the surface. A report published last week argued that their unpredictable oil releases have been historically misinterpreted as industrial spills.
But the government’s theory has not convinced environmental and energy sector analysts. Inside the oil industry, a different hypothesis is gaining force: that the spill could have originated from the poorly maintained infrastructure of state-owned energy giant Pemex, most likely an undersea pipeline or connection point.
Private sector analysts believe that the timing, location and concentration of the slick are more consistent with a leak from underground installations. Offshore engineers have noted that Pemex’s aging ducts in the region have suffered corrosion and maintenance delays for years.
Last year, Pemex was forced to repair a leaking subsea pipeline connected to its Akal‑C offshore platform after it spilled an estimated 300 barrels of crude into the Gulf of Mexico, an accident that caused swathes of oil to wash up along the ParaĂso coastline in Tabasco, and drew attention to the deteriorating infrastructure that dominates the company’s offshore network.
Pemex contained the leak after installing metal clamps and conducting emergency coastal remediation at more than a dozen contaminated sites. But accidents have continued recently, including a fire earlier this month that killed five workers at the Dos Bocas refinery, which the pipeline feeds.
Built by former president (and Tabasco native) Andrés Manuel “AMLO” López Obrador, Dos Bocas has been accused of massive contract overpricing, while Pemex has also been under the spotlight due to its strained infrastructure, large government-financed deficits, and repeated fuel theft scandals tied to politics and organized crime.
For President Claudia Sheinbaum, coming down on Pemex would bear a high political cost given the lengths that his ally and predecessor AMLO went through to revamp the state-owned firm’s role in the economy. But coastal communities are also demanding answers, and if Pemex is truly responsible, it could be costly to Sheimbaum’s reputation, considering her background as an environmental engineer.
ARGENTINA
US appeals court reverts YPF nationalization lawsuit
Debt-stricken Argentina received a huge boost last week when a US federal appeals court overturned a ruling that mandated an extra USD 16 billion in compensation to plaintiffs claiming damages from the 2012 nationalization of the country’s flagship oil and gas firm YPF.
The narrow 2-1 victory came as a surprise to many analysts, following multiple Argentine losses in international economic proceedings. These included a 2012 sovereign debt dispute with Paul Singer’s hedge fund that cost USD 9 billion, a 2023 UK ruling that Argentina manipulated economic reports to reduce bond payouts, multiple World Bank arbitration lawsuits over nationalizations and price freezes, and more.
👉 Why it matters. Yet none of those cases was bigger than that of YPF, the damages from which accounted for a stunning 45% of Argentina’s total federal budget for 2024. Even selling the 51% stake that Argentina currently holds in the firm, worth around USD 8 billion, would not have been enough to cover the claims.
The country had expropriated 51% of YPF’s shares from Spain’s Repsol in 2012, paying USD 5 billion in compensation, but the second- and third-largest investors in the firm at the time protested that the Argentine state violated YPF’s bylaws by failing to make a tender offer for their shares as well.
The appeals’ court sided with Argentina, which said that local nationalization laws superseded corporate governance rules even if the firm’s shares were traded outside the country.
Celebrating the news, President Javier Milei pointed at the two main figures behind YPF’s nationalization: former President Cristina Kirchner and her economy minister at the time, Axel Kicillof. “We had to fix the screw-ups of the useless, incompetent imbecile that is Kicillof, during the second government of the corrupt and now jailed Cristina Kirchner,” Milei said.
But Kirchner and Kicillof were also in triumphant moods, seeing the ruling as vindication of their strategy. “It is clear that this public interest expropriation was done in accordance with the law,” Kirchner argued. “This exposes years of lies, a narrative propelled by vultures to question a sovereign decision and make themselves richer,” Kicillof added.
While the result brings huge financial relief to Milei’s administration, it will also lift an enormous monkey off Kicillof’s back. The multibillion-dollar YPF trial was one of the strongest points of attack against Kicillof’s presidential aspirations, with critics pointing that his decision to ignore minority shareholders would end up costing the country many times what Argentina’s stake in the company was worth.
YPF now lies at the heart of energy developments in the Vaca Muerta basin, a strategic reserve home to the world’s second-largest shale gas deposits, which is turning Argentina from a net energy importer to an exporter.
Speculation around the case includes whether Donald Trump’s administration might have played a role in the decision. The US president already bailed out the country ahead of its midterm elections last year to stop a run against the currency. Argentina’s leading lawyer in the case, Robert Giuffra, has also represented Trump in recent instances.
Controversy in Argentina also centers on the Eskenazi family, who filed the lawsuit in the first place. Local journalists have repeatedly pointed to the Eskenazis as former frontmen for the Kirchners, who allegedly tried to wrest control of the firm from former President Néstor Kirchner’s heirs, triggering Cristina Kirchner’s decision to nationalize the company.
QUESTION OF THE WEEK
Last Friday, we asked where General Augusto Pinochet was arrested after leaving power. You weren’t fooled — every respondent correctly answered the UK.
Pinochet was indicted for human rights violations by a Spanish judge in 1998. He was arrested in London six days later and held under house arrest for 18 months before the British government released him in 2000. He returned to Chile, where he faced several criminal charges, but died in 2006 without ever having been convicted.
QUICK CATCH-UP
🚢 A Russian oil tanker carrying 100,000 tonnes of crude oil arrived in Cuba this week, bringing relief to the island’s dramatic energy crisis after US President Donald Trump said he would not oppose humanitarian shipments. Blackouts have become a daily occurrence in Cuba since the fall of Nicolás Maduro in Venezuela, whose cheap oil served as a subsidy for Havana’s struggling economy.
⚖️ Honduras’ parliament successfully impeached Prosecutor General Johel Zelaya, an ally of former left-wing President Xiomara Castro, while Supreme Court Chief Justice Rebeca Obando filed her resignation in order to avoid a similar fate — two moves that consolidate conservative President Nasry Asfura’s power after a highly disputed election in 2025.
✏️ An 18-year-old Chilean student stabbed five people and killed one during a premeditated attack at his high school in the northern city of Calama. The perpetrator, who had posted videos on social media paying homage to famous killers hours before the attack, was apprehended, subdued and disarmed by other students before being taken into custody.
âš˝ After overturning a second-half 1-0 deficit to eliminate Suriname last week, Bolivia lost 2-1 to Iraq and missed out on the final spot for the 2026 World Cup, to be held in the US, Mexico and Canada. This means South America will only be represented by Argentina, Brazil, Ecuador, Uruguay, Paraguay and Colombia in the tournament.