Credit: Science & Society Picture Library/SSPL/SSPL via Getty Images

Historical Insights Oil Expropriation

The countries affected by the expropriation instituted an embargo against Mexican oil, decreasing exports by 50 percent. About 1913, Tampico, Mexico. Credit: Science & Society Picture Library/SSPL/SSPL via Getty Images

Oil Expropriation

Difficulties with foreign-owned oil companies caused President Lázaro Cárdenas to expropriate oil in 1938.

Strikes and labor unrest were the order of the day at oil companies in 1930s Mexico. As the country became the second-largest oil producer in the world in the 1920s, foreign-owned oil companies moved in and exported most of the oil while grossly underpaying their Mexican employees. The Mexican Supreme Court created a labor agreement, which was ignored by the foreign companies. On March 18, 1938, President Lázaro Cárdenas declared all the country’s oil belonging to Mexico, seizing foreign assets. “With the expropriation of foreign oil properties, a wave of delirious enthusiasm swept over Mexico…as the people felt that a day of deliverance had come,” reported U.S. ambassador Josephus Daniels. Indeed, celebrations occurred all over the country. The expropriation, along with the founding of Mexican oil company Pemex, marked the end of foreign oil companies drilling in Mexico.