Canada Seeks Oil Supply Boost Amid Iran Conflict-Driven Market Volatility
Canada is exploring ways to boost its oil supply amid global crude market volatility caused by the war in Iran. The country's energy minister, Tim Hodgson, has confirmed that officials are reviewing whether planned maintenance activities can be delayed to free up additional production capacity.
The Strait of Hormuz, through which about a fifth of the world's oil supply flows, is seeing exports curtailed due to the conflict in Iran. This, combined with maintenance plans in Alberta's oil sands set to cut output by 150,000 barrels a day or more in the second quarter, has narrowed the discount on Canadian heavy crude.
Western Canadian Select, a grade of heavy crude, has surged to its highest price in more than three years, while the government-owned Trans Mountain pipeline is being utilized at about 81% capacity. Rail shipments remain an option for transporting more oil, though volumes have fallen as new pipeline capacity became available.