WCS Crude Discount Widens to 2023 Highs Amid Shipping Costs and Pipeline Constraints

The discount on Western Canada Select (WCS) crude oil widened further on Monday, reaching levels not seen since 2023. The price gap between WCS and the North American benchmark West Texas Intermediate (WTI) futures expanded to $24.95 per barrel for November delivery in Hardisty, Alberta, up from $24.80 the previous day. This discount is now over $10 wider than it was at the same point last month.

The surge in global freight prices, driven by recent attacks on ships since the US-Iran war began in late February, has made re-exporting Canadian heavy crude from the US Gulf Coast increasingly expensive. Traders noted that Canada’s main crude export pipelines are near full capacity, leaving limited options to manage the strong production from the country’s oil sands region.

Additionally, rising imports of Venezuelan crude into the US Gulf Coast are adding pressure on Canadian barrels. Global oil prices remained relatively stable on Tuesday, recovering from earlier losses as the market weighed various factors, including increased Middle Eastern crude exports and a planned release of emergency diesel and crude stockpiles by the Group of Seven.