In the aftermath of Mexico’s seismic 2024 election, President-elect Claudia Sheinbaum faces a critical conundrum that could define her presidency: Can she reconcile Morena’s statist energy agenda with Mexico’s pressing need for investment and modernization?

Sheinbaum’s landslide victory – securing an unprecedented 58-63% of the vote – grants her a mandate that surpasses even AMLO’s. But this overwhelming power brings with it a paradox. While Morena’s base clamors for a continuation of the “Fourth Transformation,” Mexico’s energy sector teeters on the brink of crisis.

The recent Supreme Court ruling on the 2021 Hydrocarbons Law exemplifies this tension. By granting broad discretion to suspend energy projects under the guise of “national security,” the Court has inadvertently undermined the very energy security it claims to protect. This decision, coupled with Morena’s attempts to weaken legal safeguards like amparos, sends a chilling message to potential investors.

Yet, here’s the rub: Mexico desperately needs private investment to modernize its aging energy infrastructure and meet growing demand. PEMEX and CFE, despite their favored status, lack the capital and expertise to do it alone. Sheinbaum knows this, having hinted at the importance of public-private partnerships during her campaign.

So, what’s a newly-minted president to do? Sheinbaum could double down on AMLO’s nationalist agenda, potentially cementing Morena’s political dominance but at the cost of Mexico’s energy future. Or, she could pivot, leveraging her immense political capital to chart a more pragmatic course – one that balances state control with the undeniable need for private sector expertise and investment.

The stakes couldn’t be higher. Mexico’s energy policies will reverberate far beyond its borders, influencing everything from U.S.-Mexico relations to the future of the USMCA. As the 2026 USMCA review looms, Sheinbaum’s choices in the energy sector could make or break North American economic integration.

Will Sheinbaum have the political acumen – and courage – to thread this needle? Or will ideological purity trump practical necessity? The answer to this question will shape not just Mexico’s energy landscape, but its economic future for decades to come.

At IPD Latin America, we’re watching these developments with keen interest. The next few months will be crucial, as Sheinbaum’s cabinet appointments and early policy decisions signal the direction of her presidency. One thing is certain: in Mexico’s high-stakes energy game, there are no easy answers.