CALGARY — Alberta’s heavy crude oil is selling at its steepest discount to US oil since October 2022, as rising Venezuelan supplies and rising tanker costs prevent Canadian producers from capturing the full benefit of a global oil rally.Western Canadian Select’s (WCS) discount to the monthly average of West Texas Intermediate (WTI) — the US benchmark — widened to US$31 a barrel in Alberta as of Tuesday, according to General Index.Canadian heavy crude’s discount also reached US$23.50 a barrel on the US Gulf Coast, the widest since 2018, accordingto Link Data Services.Bloomberg reports the widening gap comes as the Iran conflict continues to push global oil prices higher while disrupting the Strait of Hormuz shipping routes.On Friday, WTI hit roughly $104.23 a barrel, up 2.19% from Thursday, while Brent crude hit US$117.10, as another attack on a commercial tanker near the Strait of Hormuz and renewed Houthi threats against Saudi Arabia’s energy infrastructure continued to fuel uncertainty over petroleum supplies.However, Alberta’s crude has missed those price gains as the overall price of WCS has predominantly remained below US$70 a barrel since June, even as Brent and WTI futures have climbed..WTI crude tops $102 as Middle East conflict drives oil prices higher.Steven Ledbetter, chief operating officer of US refiner HF Sinclair Corp., said during an earnings call that wartime shipping disruptions have left “quite a bit of crude on the water in tankers,” which has continued to hamper Gulf Coast exports.“All of that ends up putting pressure on WCS,” Ledbetter said.That pressure underscores the stakes in Prime Minister Mark Carney’s efforts to diversify export options as international customers — particularly in the Asian marketplace — look to find alternative and reliable energy supplies due to the ongoing geopolitical uncertainty in the Middle East.Currently, around 90% of all Canadian oil exports go to the US, and Alberta and Ottawa are now backing the Pacific Link pipeline, which, if constructed, would ship one million barrels per day to the BC coast for export to Asian markets and add more than $20 billion a year to Canada’s GDP once operational, according to the Alberta government.Tamarack Valley Energy Ltd. has secured long-term capacity on the expanded Trans Mountain pipeline beginning next year.During an earnings call on Wednesday, Tamarack president Steve Buytels said that shipping more oil to the West Coast would provide “diversification of that barrel into different markets,” which the company expects will help improve its revenue stream.
