AMERICAS OIL: PADD 2 Has Limited Options if Tariffs Hit Canadian Crude: Kpler
PADD 2 Has Limited Options if Tariffs Hit Canadian Crude:Kpler
PADD2 relies on Canadian heavy crude for 2/3 of demand and does not have easy alternatives, kpler’s Muyu Xu said at its Energy Forum.
Existing infrastructure means the region cannot receive light crude from other regions such as the Permian basin.
Some refineries may be able to shift to lighter crudes from 70:30 heavy:light ratio to 50:50, but could this would come at the expense of utilisation rates, Xu said.
Kpler’s base case is that tariffs will not materialise, or if they are imposed will be short-lived
“Trump Will have to consider the effects on domestic refining industry and onpump
Prices, “ Xu said
Tariffs on Canadian crude will see WCS prices plunge and producers maximising flows via TMX.
WTI likely to get support but heavy maintenance will limit this in near term, Kpler said.