(Bloomberg) -- Mexico’s Finance Ministry confirmed that it spent about $1.23 billion to protect 2019 revenues against falling crude prices in the world’s largest annual oil deal.

The oil producer locked in hedges at $55 a barrel, equivalent to the price approved by lawmakers for the 2019 budget, according to a Finance Ministry statement. The total expense comes to about 23.5 billion pesos.

Mexico has in recent years spent around $1 billion on average buying financial put options from Wall Street banks, a closely-watched set of trades that typically covers 200 million to 300 million barrels and has the potential to roil markets. The trade, also known as the Hacienda hedge, is considered the largest oil deal on Wall Street.

Banks writing put options for Mexico -- contracts that give it the right to sell oil at a predetermined future price -- hedge themselves in the market by selling crude and refined products futures and swaps.

On Thursday, Brent oil prices for December 2019 settled up 14 cents at $62.29 a barrel as oil extended its winning streak to the longest in almost a decade. This comes after near-term prices briefly dipped below $50 a barrel last last year.

Mexico earned billions of dollars from the hedge in 2015 and 2016 after crude oil plunged, locking in above-market prices.

Last year the government took steps to conceal further details about the annual oil hedges, telling its national audit body releasing more information “could increase the cost of the oil hedge.”

The Mexican oil hedge runs from the beginning of December until the end of November.

--With assistance from Catherine Ngai.

To contact the reporter on this story: Dale Quinn in Mexico City at dquinn40@bloomberg.net

To contact the editors responsible for this story: Carlos Manuel Rodriguez at carlosmr@bloomberg.net, David Marino, Pratish Narayanan

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