The Trans Mountain pipeline expansion (TMX), operational since May, has significantly increased the flow of Canadian light crude oil to the U.S. West Coast. This surge has surprised industry experts who initially anticipated the pipeline would primarily deliver heavy crude to Asia and California. Instead, waterborne imports of Canadian light crude to the West Coast climbed to nearly 100,000 barrels per day (bpd) in September, a sharp increase from just 7,000 bpd in June.
In June, Reuters reported that Phillips acquired a cargo for its Ferndale, Washington, refinery, Marathon Petroleum for its Los Angeles refinery, and Valero Energy Corp for its Benicia, California, refinery.
As TMX increases its flow of Canadian crude, it will diversify and alter import patterns, including those from Latin America.
Reuters further notes that the price advantage of Canadian synthetic crude, which trades close to West Texas Intermediate (WTI) crude prices, has made it an attractive option for U.S. refiners. Rory Johnston of Commodity Context noted that synthetic crude maintained a small premium over WTI through September, significantly down from its April peak.