US refineries are the only ones in the world able to process heavy crude oil. As such, Mexican producers are largely dependent on the US market and will have to reduce their prices to match Canadian suppliers.
For instance, Mexican oil supplier Pemex was forced to increase a discount given to its US buyers from 90 cents per barrel in November to $3.70 per barrel in January, according to Bloomberg. At the moment, the cost of Canadian heavy crude oil delivered to US refineries by pipeline is estimated to be at the same as Mexican oil delivered by tanker.
Exports of Canadian oil to the United States have been growing in the past 10 years as an increase in oil prices made the use of steam recovery and bitumen mining in the Alberta tundra profitable. Shipments to the United States increased by 63 percent in five years, according to the news outlet. While imports from Canada have been growing recently in the United States, imports from other countries have been falling. Mexican shipments of heavy crude oil fell from 835,000 barrels per day in September 2012 to 675,000 barrels per day in September 2014.