Hours after Red Bull were handed their punishment for breaching F1's cost cap in Max Verstappen's title-winning 2021 season - handed a $7m fine and a reduction in car development - it was Ferrari who sped to the front ahead of the newly-crowned world champions.

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Sainz led the way with a 1:20.707, 0.046s ahead of Charles Leclerc at the Autodromo Hermanos Rodriguez.

But there was barely anything to split the top five, which included Lewis Hamilton.

Sergio Perez and Verstappen had identical times for Red Bull, 0.120s off Sainz, while Hamilton was only two hundredths further back in a Mercedes car that is tipped to compete for a first win of the season in Mexico.

Verstappen, aiming for a record-breaking 14th victory of 2022 this weekend, had a spin in the middle sector during a scruffier-than-usual session, complaining of "no grip in his Red Bull".

Fernando Alonso, meanwhile, was also within two tenths of the Ferrari benchmark in the Alpine.

The session - a crucial one with F1 undergoing more tyre testing in a longer Practice Two later on Friday - also saw two red flags, with two of the rookies taking part seeing their track action cut short.

First, Pietro Fittipaldi, filling in for Haas, had an engine failure, before AlphaTauri's stand-in Liam Lawson had a similar reliability issue late on.

Elsewhere, Logan Sargeant, Nyck De Vries and Jack Doohan finished 17th, 18th, and 19th for Williams, Mercedes and Alpine respectively. Sargeant and De Vries will be on the F1 grid full-time next season.

Brundle: Red Bull punishment 'about right'

Sky Sports F1's Martin Brundle

"I think it's about right, perhaps slightly light. I think there are mitigating circumstances as Christian (Horner) has pointed out.

"There are no winners in this, it's messy. It is year one of these regulations and you'd expect if they were over the limit next year, they would have to be doubled down on really, really hard.

"Of course, anybody else who breaches it, will have to be treated equally as hard as this one has been.

"It will hurt them but they're starting with a very good car, it's CFD as well, the digital computerised wind tunnel as well.

"They'll just have to make sure that when they go to the wind tunnel, they're acing it and making the most of each run. Clearly, it will hurt them developing through next year and so it should."