Despite a global oil rally, Canadian crude is trading well below international
peers. In recent weeks heavy Canadian crude has widened its discount to U.S.
grades to about $26/bbl. The spread is attributed to multiple effects of
Trump-era foreign policy: after Maduro was ousted in January Venezuelan heavy
crude increased competitive supply into refiners set up for heavy grades, and a
subsequent Iran war pushed tanker freight sharply higher, creating a U.S. heavy
crude surplus that damped demand for Canadian barrels. Canada’s sole west-coast
export pipeline is at capacity, limiting producers’ ability to obtain higher
prices. Mark Carney has backed construction of a new pipeline to the British
Columbia coast with 1.0 mln bpd capacity to relieve the bottleneck and allow
Alberta crude to price more against Brent.
