Canadian oil producers found a way to access the growing Asian energy market without the controversial Trans Mountain pipeline.
A cargo of heavy crude was sent to China after being railed to a terminal in Portland, Oregon, according to U.S. Census data and people with knowledge of the situation. The crude came from Alberta’s oil sands, the people said.
Census data showed that the January export out of Portland to China totaled 243,879 barrels of foreign crude. The oil was listed as having an API of under 25, indicating it was heavy oil, like the type produced in the Canadian oil sands.
Canadian oil producers are trying to diversify their customer base in hopes that having more buyers will improve the prices they receive for the crude. Nearly all the country’s oil exports go to the U.S.
Heavy Canadian crude prices are trading near their biggest discount to West Texas Intermediate futures in almost four years as new oil sands production coincides with the reduction in pressure on the Keystone pipeline after a spill in November. Other pipelines are filled to capacity and exporters attempting to ship their crude via rail have also faced bottlenecks on the system amid a backlog of grain shipments.
Western Canadian Select, an oil sands benchmark, is trading at a $25.75 a barrel discount to West Texas Intermediate futures and a $29.68 a barrel discount to Brent, the international benchmark, data compiled by Bloomberg show.