Canadian oil shipments to the U.S. jumped to the highest volume since the start of the year thanks in part to the startup of a long-delayed Canadian pipeline.
Weekly oil deliveries from America’s northern neighbour reached 4.04 million barrels day, the most since January, according to the Energy Information Administration. It’s only the third time the U.S. has imported more than 4 million barrels a day of Canadian crude since the agency began compiling weekly data in 2010.
It’s likely these increased flows will be the new norm mainly because of the expanded Line 3, said Elisabeth Murphy, ESAI Energy LLC upstream analyst for North America. In fact, weekly volumes should start to average closer to 3.7-3.8 million barrels a day from here, from current levels of around 3.5 million, she added.
The additional barrels from Canada come as a relief to U.S. refiners struggling with less supply from OPEC+, shrinking imports from Latin America, and more recently, the loss of about 30 million barrels of Gulf of Mexico production after Hurricane Ida.
Gulf Coast refineries have increasingly been pulling from Canada to offset the crude production in the Gulf of Mexico that remains shut since Hurricane Ida swept through over a month ago, said Shirin Lakhani, director of global oil service at Rapidan Energy Group.
Last week, Enbridge Inc. started its new Line 3 crude pipeline after years of delays. It can transport 760,000 barrels a day of heavy and light oil, nearly double the size of the old line it replaced.
© 2021 Bloomberg L.P.