Crude Oil Imports from Canada Reach Record High After Pipeline Expansion
(P&GJ) — According to the U.S. Energy Information Administration (EIA), U.S. imports of crude oil from Canada reached a record 4.3 million barrels per day (bbl/d) in July 2024, following the expansion of Canada’s Trans Mountain pipeline.
This data, the latest available in the EIA’s Petroleum Supply Monthly (PSM), highlights a significant increase in Canadian crude oil reaching U.S. markets.
The Trans Mountain Expansion (TMX) project, which began commercial operation in May 2024, tripled the pipeline’s previous capacity from 300,000 bbl/d, facilitating more crude oil movement from Alberta to Canada’s west coast for export. Historically, Alberta’s crude has primarily reached the U.S. Midwest by pipeline or the U.S. Gulf Coast by rail, where it is either refined domestically or re-exported by sea. Now, with TMX running parallel to the original Trans Mountain pipeline, larger volumes of crude can flow directly to British Columbia's coast for export to Pacific Ocean markets.
Since TMX went online, early data suggest that U.S. West Coast refiners have been primary buyers of the increased export volumes. From June to September, over half of all maritime crude oil exports from Western Canada went to the U.S. West Coast, with the rest reaching destinations in Asia, as reported by Vortexa Analytics. U.S. West Coast imports alone reached 498,000 bbl/d in July 2024—a record for the region and a 115% increase over July 2023, according to the PSM.
The Western Canadian Select (WCS) crude oil price at Hardisty serves as a regional benchmark for Alberta's production. Historically, WCS trades at a discount to other benchmarks due to its higher sulfur content, lower API gravity, and additional transport costs from Alberta to export locations. Since TMX’s expansion, its additional capacity has had a mixed impact on WCS prices. In July 2024, the monthly average Brent price premium over WCS was $21 per barrel, $5 higher than the previous year. By August, the price differential remained between the five-year (2019–23) average and last year’s levels, while the September differential dipped slightly below the five-year average. As of October, the Brent premium over WCS narrowed by $10 compared to October 2023.
WCS differentials typically widen in the fall when Midwestern refineries undergo maintenance, temporarily reducing demand. Should current differentials hold through year-end, it could indicate that the expanded TMX capacity is providing some insulation for Canadian crude producers against fluctuating Midwestern refinery demand.
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