Suppliers rush to push out as much oil as possible as it’s more valuable now than in the future
A flood of Canadian oil is heading south to the United States to beat President Donald Trump’s threatened tariffs.
Enbridge Inc.’s Mainline, the largest oil export pipeline from Canada to the U.S., will cut the volumes of light oil shippers are allowed to send on the line 12 per cent below the amount they’ve requested, a way of handling the increased demand for space. That’s the steepest rationing since last spring, when the expanded Trans Mountain pipeline started up and provided shippers with more capacity. Rationing for heavy oil on the Mainline reached eight per cent.
The surge in oil south may help refill inventories in the U.S. Midwest, including at the key hub in Cushing, Okla., where stockpiles recently fell to the lowest in a decade, Bell said.
Heavy Canadian Cold Lake crude sold on the Gulf for US$3 a barrel less than West Texas Intermediate last week as the threat of tariffs increased, according to Link prices. The discount was the narrowest in more than a year and a half.
Marathon Petroleum Corp., Exxon Mobil Corp., Flint Hills Resources LLC and BP PLC are some of the largest importers of Canadian crude, according to Energy Information Administration (EIA) data for 2023.
Much of the Canadian oil ends up at refineries in the U.S. Midwest, including Exxon’s Joliet, Marathon’s Robinson and Citgo Petroleum Corp.’s Lemont refineries in Illinois and BP’s Whiting refinery in Indiana. But other Canadian barrels are shipped across the U.S. to refineries as far as California and Texas, with about 60 per cent of America’s crude imports in 2023 coming from Canada, EIA data show.
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