Canadian Crude Imports

Data from the new Energy Information Administration (EIA) monthly report on crude-by-rail (CBR) shows that shipments from Canada increased from less than 10 Mb/d two years ago in January 2012 to over 130 Mb/d in January 2015. The increase in CBR movements mirrors increasing Canadian crude exports to the U.S. – the majority of which are still pipeline movements. Today we look at the destination markets for Canadian CBR in the light of congested pipeline capacity out of Western Canada.

Could the US end up exporting 700 MMb/d of crude to Canada by the end of the decade? Despite static domestic refinery demand and a growing production surplus, Canadian imports of crude increased this year. How could that be? The reason for this apparent anomaly is that East Coast Canadian producers are getting better prices exporting their crude anywhere but the US rather than competing at home against cheaper imports from South Texas and North Dakota. Today we explain some unintended consequences of the US crude export regulations.