Canadian heavy crude, primarily from Alberta’s oil sands, is enjoying renewed global demand as Asian refineries invest in equipment to process heavier grades and supplies from Latin America shrink, finds a report by the Canadian Energy Centre.
“The refining industry wants heavy oil. We are actually in a shortage of heavy oil globally right now, and you can see that in the prices,” said Susan Bell, senior vice-president of downstream research at Rystad Energy.
The price gap—or differential—between Western Canadian Select (WCS) and West Texas Intermediate (WTI) has narrowed significantly to as low as US$10 per barrel this year, down from nearly US$50 in 2018. The narrowing spread reflects pipeline improvements like the Trans Mountain Expansion, which opened in May 2024 and pushed Canadian oil exports outside the U.S. to a record 525,000 barrels per day in July.
Growing Asian buyers, including China, Japan, Brunei and Singapore, are now receiving Canadian heavy crude. Analysts warn that while market fundamentals support more pipeline expansion, the key obstacles are political—such as Canada’s tanker-ban law and an oil-and-gas emissions cap.
As Kevin Birn of S&P Global notes: “There is absolutely a business case for a second pipeline to tidewater.”
With global demand for heavier, more complex crude expected to rise through 2050, Canada’s oil-sands sector finds itself strategically positioned—if it can navigate the regulatory and infrastructure hurdles ahead.