The discount on Western Canada Select (WCS) crude oil to North American benchmark West Texas Intermediate futures widened again on Monday, hovering at levels not seen since 2023, as soaring global freight prices put pressure on Canadian barrels being re-exported off the US Gulf Coast.
WCS for November delivery in Hardisty, Alberta, settled at $24.95 a barrel below the US benchmark WTI, according to brokerage CalRock, compared with $24.80 on Monday. The discount remains more than $10 wider than it was at this point in last month’s trading cycle.
* The cost to transport oil on tankers globally has hit record highs in recent weeks following attacks on ships since the US-Iran war began in late February
* That has made re-exporting Canadian heavy crude barrels from the US Gulf Coast cost-prohibitive, traders said, adding Canada’s main crude export pipelines are essentially full, leaving few options to absorb strong production coming out of the country’s oil sands region
* Rising volumes of Venezuelan crude being imported into the US Gulf Coast are also putting pressure on Canadian barrels
* Global oil prices were little changed on Tuesday after recovering earlier losses, as the market weighed increases in Middle Eastern crude exports and a planned Group of Seven release of emergency diesel and crude stockpiles against supply concerns related to attacks by Yemen’s Iran-backed Houthis
(Reporting by Amanda Stephenson in Calgary; Editing by Diti Pujara)