𝐆𝐑𝐄𝐄𝐃𝐘, 𝐌𝐄𝐗𝐈𝐂𝐎-𝐇𝐀𝐓𝐈𝐍𝐆 𝐂𝐀𝐑𝐓𝐄𝐋𝐒 𝐒𝐓𝐈𝐋𝐋 𝐒𝐌𝐔𝐆𝐆𝐋𝐈𝐍𝐆 𝐒𝐓𝐎𝐋𝐄𝐍 𝐂𝐑𝐔𝐃𝐄 𝐎𝐈𝐋 𝐈𝐍𝗧𝗢 𝐓𝐇𝐄 𝐔𝐍𝐈𝐓𝐄𝐃 𝐒𝐓𝐀𝐓𝐄𝐒

       Sources: El Bravo, Kharon the Brief, Todayville

The U.S. Treasury Department has taken new action against a growing criminal scheme in which Mexican cartels are stealing crude oil from Mexico and smuggling it across the Texas border. The Office of Foreign Assets Control (OFAC) announced this week that it has sanctioned several individuals and companies tied to the Cartel Jalisco Nueva Generación, or CJNG, one of the most powerful and violent drug cartels in Mexico.

These groups are involved in what is known in Mexico as “huachicol,” the large-scale theft of crude oil and refined fuel from the country’s state-owned energy company, Petróleos Mexicanos, or Pemex. Cartels use a mix of threats, bribes, and illegal pipeline tapping to steal the fuel. They then smuggle it across the border disguised as waste oil or hazardous materials. It is sold to unsuspecting U.S. companies and sent to countries like Japan, India, and others. According to U.S. officials, each shipment can earn the smugglers around $5 million, making oil theft one of the biggest sources of income for cartels after drug trafficking.

The oil theft is closely linked to a range of other crimes, including fentanyl smuggling, corruption, and violence. OFAC stated that these operations have contributed to instability and lawlessness in both Mexico and the United States and are damaging legitimate oil and gas businesses. The illicit oil is sold at a discount at cartel-controlled gas stations or on the black market in Mexico and Central America.

Among those sanctioned is Cesar Morfin Morfin, also known as “Primito,” a high-ranking CJNG member from Tamaulipas. U.S. and Mexican authorities say he plays a key role in smuggling drugs like fentanyl and methamphetamine into the U.S. and has now shifted much of his focus to stolen crude oil. His brothers Alvaro Noe and Remigio Morfin were also sanctioned for alleged involvement in CJNG drug and fuel operations. U.S. Customs and Border Protection and the Mexican government list the Morfin brothers among their top ten most wanted.

OFAC said Primito and his network charge fees to trucks moving crude oil across the Tamaulipas–Texas border and have been falsifying customs documents to move stolen oil. The network includes companies in both Mexico and Texas that appear to be legitimate transportation firms but are linked to oil smuggling.

Two companies, Grupo Jala Logistica and SLA Servicios Logisticos Ambientales, were sanctioned for smuggling crude oil across the border. Investigations found that they are part of larger networks operating on both sides of the border, using similar company names and addresses to hide cartel involvement. One of the key figures is Jose Luis Hernandez Juarez, who owns companies in Tamaulipas and Texas, including several based at the same address in Hidalgo, Texas. Despite limited or no online presence, these firms are moving oil and hazardous materials that may be stolen.

Authorities are warning financial institutions to look out for signs of suspicious activity related to stolen oil. A joint alert issued by OFAC and other federal agencies states that fuel theft has become the most significant non-drug revenue source for cartels and supports their global drug and criminal operations.

Meanwhile, in Tamaulipas, the Mexican government has increased security at oil wells following reports from private companies about cartel activity near exploration and drilling sites. Companies like Jaguar and 5AM raised alarms after criminal groups were spotted in areas where they were supposed to be operating. As a result, state authorities have implemented security measures, including building safe stations along highways and focusing surveillance on vulnerable zones.

Officials from the state of Tamaulipas say that while criminal activity is still a concern, crime rates have gone down in recent years. They argue that public perception is worse than the reality on the ground and point to ongoing efforts to secure the energy sector and protect legal investments.

Still, between 2020 and 2022, some companies were forced to change or suspend their oil drilling plans due to safety concerns. In regions like Soto La Marina and San Fernando near the U.S. border, insecurity has significantly impacted the energy industry.

The crackdown on oil smuggling is part of a broader effort by U.S. and Mexican authorities to dismantle cartel revenue sources beyond drugs. Since designating Mexican cartels as terrorist organizations earlier this year, the U.S. Treasury has sanctioned dozens of individuals and businesses tied to CJNG, the Sinaloa Cartel, and others.

Officials say these actions are just the beginning of a larger strategy to expose how cartels are embedding themselves in legitimate industries and using international trade to fund violence and crime on both sides of the border.