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AMERICAS OIL: Canadian Oil, Mars Prices Spike in USGC Market on Tariffs: BBG

AMERICAS OIL
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Canadian Oil, Mars Prices Spike in USGC Market on Tariffs: Bloomberg

  • Physical prices of heavy Canadian crude and medium sour Mars Blend produced in the US Gulf of Mexico spiked today as US President Trump’s tariffs and Venezuela sanctions redraw flows into one of the world’s largest refining centers.
  • Canadian Cold Lake was quoted at a discount of $1.75/bbl to US WTI oil futures as of noon CT, up from -$3 Monday in the pipeline market; level is currently the highest since March 2022.
  • Prices rallied as USGC refiners shy away from Mexican oil, favoring Canadian crude of similar quality, according to people with knowledge of the situation, who asked not to be named as they aren’t authorized to speak publicly.
  • Mexico is the main supplier of crude oil to US refiners after Canada, providing ~500k b/d to USGC refineries.
  • The Trump administration imposed tariffs of 25% on Mexican crude and 10% on Canadian crude. The duty on Mexican crude is equivalent to ~$17/bbl, a cost that needs to be fully absorbed by US refiners as Mexico can reroute oil to Asia and Europe.
  • Prices of Mars Blend is at a premium of around $3 to US oil futures; if it holds up, it would be the highest since May 2020; on Monday, prices closed at +$2.10.
  • In Alberta, Heavy Western Canadian Select (WCS) for April’s discount to WTI widened to $14.35/bbl, according to person familiar with prices. The discount closed at $13.75/bbl on Monday, according to General Index prices posted on Bloomberg.
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Canadian Oil, Mars Prices Spike in USGC Market on Tariffs: Bloomberg

  • Physical prices of heavy Canadian crude and medium sour Mars Blend produced in the US Gulf of Mexico spiked today as US President Trump’s tariffs and Venezuela sanctions redraw flows into one of the world’s largest refining centers.
  • Canadian Cold Lake was quoted at a discount of $1.75/bbl to US WTI oil futures as of noon CT, up from -$3 Monday in the pipeline market; level is currently the highest since March 2022.
  • Prices rallied as USGC refiners shy away from Mexican oil, favoring Canadian crude of similar quality, according to people with knowledge of the situation, who asked not to be named as they aren’t authorized to speak publicly.
  • Mexico is the main supplier of crude oil to US refiners after Canada, providing ~500k b/d to USGC refineries.
  • The Trump administration imposed tariffs of 25% on Mexican crude and 10% on Canadian crude. The duty on Mexican crude is equivalent to ~$17/bbl, a cost that needs to be fully absorbed by US refiners as Mexico can reroute oil to Asia and Europe.
  • Prices of Mars Blend is at a premium of around $3 to US oil futures; if it holds up, it would be the highest since May 2020; on Monday, prices closed at +$2.10.
  • In Alberta, Heavy Western Canadian Select (WCS) for April’s discount to WTI widened to $14.35/bbl, according to person familiar with prices. The discount closed at $13.75/bbl on Monday, according to General Index prices posted on Bloomberg.