The \u201cdifferential\u201d between Western Canadian Select (WCS) and West Texas Intermediate (WTI) blew out to nearly US$50 per barrel in 2018 because of pipeline bottlenecks, forcing Alberta to step in and cut production.<\/p>\n
So far this year, the differential has narrowed to as little as US$10 per barrel, averaging around US$12, according to<\/a> GLJ Petroleum Consultants.<\/p>\n \u201cThe differential between WCS and WTI is the narrowest I\u2019ve seen in three decades working in the industry,\u201d Bell said.<\/p>\n Trans Mountain Expansion opens the door to Asia<\/p>\n Oil tanker docked at the Westridge Marine Terminal in Burnaby, B.C. Photo courtesy Trans Mountain Corporation<\/p>\n The price boost is thanks to the Trans Mountain expansion, which opened a new gateway to Asia in May 2024 by nearly tripling the pipeline\u2019s capacity.\u00a0<\/p>\n This helps fill the supply void left by other major regions that export heavy oil \u2013 Venezuela and Mexico \u2013 where production is declining or unsteady.\u00a0<\/p>\n Canadian oil exports outside the United States reached a record 525,000 barrels per day<\/a> in July 2025, the latest month of data available from the Canada Energy Regulator.\u00a0<\/p>\n China leads Asian buyers since the expansion went into service, along with Japan, Brunei and Singapore, Bloomberg reports<\/a>.\u00a0 Asian refineries see opportunity in heavy oil<\/p>\n \u201cWhat we are seeing now is a lot of refineries in the Asian market have been exposed long enough to WCS and now are comfortable with taking on regular shipments,\u201d Bell said.\u00a0<\/p>\n Kevin Birn, chief analyst for Canadian oil markets at S&P Global, said rising demand for heavier crude in Asia comes from refineries expanding capacity to process it and capture more value from lower-cost feedstocks.<\/p>\n \u201cThey\u2019ve invested in capital improvements on the front end to convert heavier oils into more valuable refined products,\u201d said Birn, who also heads S&P\u2019s Center of Emissions Excellence.\u00a0<\/p>\n Refiners in the U.S. Gulf Coast and Midwest made similar investments over the past 40 years to capitalize on supply from Latin America and the oil sands, he said.\u00a0<\/p>\n While oil sands output has grown, supplies from Latin America have declined.<\/p>\n Mexico\u2019s state oil company, Pemex, reports<\/a> it produced roughly 1.6 million barrels per day in the second quarter of 2025, a steep drop from 2.3 million in 2015 and 2.6 million in 2010.<\/p>\n Meanwhile, Venezuela\u2019s oil production, which was nearly 2.9 million barrels per day in 2010, was just 965,000 barrels per day this September, according to<\/a> OPEC.<\/p>\n The case for more Canadian pipelines<\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/ca\/wp-content\/uploads\/2025\/11\/240525_WMT-Tanker-27-scaled.jpg\")
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