TMX Opening to Shake Up USWC Market: Argus

The approaching start-up of the Trans Mountain Expansion could reshuffle the Pacific crude market, Argus said.

• The expansion will triple capacity to export Canadian crudes to the Pacific coast to 890k b/d.
• Two cargoes have already been sold to Pacific, Argus said.
• Canadian crude is expected to compete primarily with Russian and Middle East grades in APAC markets.
• However, stagnant USWC demand at 1.4m b/d will create competition with other grades, such as Alaskan North Slope - a third of USWC supplies.
• Competing with ANS is challenging due to current refinery configurations; it is more likely that Canadian supplies will dislodge Ecuadorian grades, supplying around 125k b/d.
• Ecuadorian law requires its crude to be shipped by Flopec, limiting shipping competition. This can create inflated freight rates.
• Halted production at several Ecuadorian fields is likely to reduce output by 48k b/d in 2024.