Portugal celebrated, but the game was then held up as the referee waited for the assistant to check the replay, before the goal was ruled out roughly 40 seconds later because Pepe had been adjudged to be offside.
The FIFA Confederations Cup is viewed by experts as a rehearsal for the organizers, with only one year to go to the FIFA World Cup.
Portugal had an early effort controversially disallowed by the video referees but they eventually took the lead after 34 minutes through Ricardo Quaresma after a mistake by Carlos Salcedo let Cristiano Ronaldo through on goal.
Portugal take on tournament hosts Russian Federation in their next group-stage outing on Wednesday afternoon, before then facing outsiders New Zealand three days later.
Carlos Vela and Hernandez again combined after a mistake by Borussia Dortmund defender Raphael Guerriero.
Beating Pakistan shows we can retain Trophy, says India's Virat Kohli
Kohli and Yuvraj stood out in an all-round batting effort, propelling India to 319 for three after rain halted proceedings twice. While India produced a resounding win, captain Kohli is not very pleased with India's fielding.
Portugal players will wear black armbands against Mexico in the today to honour compatriots that passed away from forrest fires. RIP. However, other than that he did not threaten Mexico goalkeeper Guillermo Ochoa. Just eight minutes later, Javier Hernandez scored the equalizer for Mexico.
But the Portugal captain created another shooting opportunity for Quaresma with 10 minutes remaining and, although Ochoa saved comfortably, they continued to pile late pressure on Mexico.
With the half entering the stoppage time, former Hoffenheim striker Vargas thought he had given Chile a deserved lead after he finished off Arturo Vidal's through ball with a chipped finish over Ondoa.
But with the 90 minutes up, Mexican defender Moreno rose highest from the final corner of the game to head in the equaliser.
At the same time, the midfield for Mexico was the better of the two with Jonathan Dos Santos being an animal in the middle of the park and winning every loose ball, while Hector Herrera and Andres Guardado also playing their part in winning the 50/50 challenges and controlling the midfield and maintaining the ball.