For the first time on record, in January 2018 U.S. Gulf Coast refiners imported more heavy oil from Canada than from Venezuela.
The difference was just 10,000 bbls/d (Canada 448,000, Venezuela 438,000), according to the U.S. Energy Information Administration (EIA), but it’s an important milestone.
Canadian have oil imports also exceeded those from Mexico in the massive refining cluster for the first time in September 2017.
The EIA attributes the increases to increases in crude by rail activity as a result of limited pipeline capacity.
“In December 2017, U.S. imports of Canadian crude oil by rail set a monthly record of 205,000 bbls/d, nearly matching the amount of rude oil shipped by rail within the United States that month (246,000 bbls/d,” the EIA said this week.
“Of the 144,000 bbls/d of Canadian crude oil imported by rail in 2017, about half (70,000 bbls/d) went to the U.S. Gulf Coast…Traditional suppliers of heavy crude oil into the Gulf Coast region, such as Venezuela and Mexico, have experienced production declines that resulted in lower crude oil exports, making Canada an increasingly important source for U.S. imports of heavy crude oil.”
Since the removal of restrictions on U.S. crude oil exports at the end of 2015, the U.S. Gulf Coast could also be an outlet for Canadian crude re-exports, the EIA noted.
But the surge in rail activity in late 2017 was likely temporary, the agency said, with low WCS pricing leading to production cuts and advanced schedules for maintenance outages.