The most significant shift is the return of state dominance in energy production and distribution. Pemex, the state-owned oil giant, has been granted more substantial control over joint ventures, ostensibly making it easier to partner with private firms while keeping decision-making power within the government. Meanwhile, CFE’s role in electricity generation has been reinforced, with new rules ensuring that at least 54% of Mexico’s electricity must come from the state utility, regardless of market competition. Even more controversially, electricity from private producers—including those using renewable energy—is now second in line, meaning the government prioritizes CFE’s power supply over cleaner, cheaper alternatives. These changes dismantle the competitive energy market created in 2013, ensuring the state holds the reins, no matter the cost.

A key—and contentious—aspect of the reforms is the elimination of independent regulators, such as the Energy Regulatory Commission (CRE) and the National Hydrocarbons Commission (CNH). These agencies were initially set up to ensure fair competition and transparency, acting as watchdogs that could keep state and private energy players in check. Now, government ministries will absorb their responsibilities, which critics warn could increase corruption and inefficiency. The administration claims this move cuts costs and streamlines decision-making, but skeptics fear it removes critical oversight and makes energy policy more vulnerable to political interference.

One of the most intriguing aspects of these reforms is their approach to renewable energy. Unlike AMLO, who largely ignored clean energy in favor of oil and gas, President Sheinbaum presents herself as an environmentalist and wants Mexico to expand its wind, solar and hydroelectric capacity. However, under these new laws, CFE—not private companies—will lead this transition. While this maintains state control, it may slow innovation and investment, as private renewable energy firms now face uncertain regulations and reduced incentives. Mexico has vast potential for green energy, but it remains unclear whether these policies will help or hinder its progress toward a sustainable future.

The real question is whether these reforms will benefit Mexico in the long run. On the one hand, the government argues that restoring state control protects Mexico’s resources from foreign exploitation and ensures that profits benefit Mexican citizens. On the other, outside observers note that removing competition and transparency could lead to inefficiencies, increased costs and an unreliable energy supply. Investors are already wary, with some reconsidering their presence in Mexico due to the unpredictable regulatory environment. Whether this bold energy shift succeeds or struggles will depend on how well the government manages state-run companies, energy demand and the transition to renewables. One thing is clear: Mexico’s energy future has taken a sharp turn, and the world is watching.