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Exports of heavy Canadian crude oil to Asian refiners are expected to jump to the highest in a year as unplanned refinery shutdowns in the United States are stifling demand for Canada’s crude in some North American refineries.
Canadian heavy-sour grades of at least 7 million barrels have already been sold to buyers in Asia and are set to load in February, sources with knowledge of the matter told Bloomberg on Thursday. This figure is the highest since January of last year, according to data from energy analytics firm Vortexa cited by Bloomberg.
Some of the largest refiners in China and India have snapped up at least 7 million barrels of Canadian crude from the oil sands, while 1 million barrels will go to Europe to Repsol, according to Bloomberg’s sources.
Sinopec’s trading unit Unipec has purchased 3 million barrels of Canadian crude, and PetroChina and India’s Reliance Industries have bought 2 million barrels each, the sources told Bloomberg.
The Cold Lake crude grade has been offered at around $22 per barrel discount to Brent for loading from the U.S. Gulf Coast, traders told Bloomberg.
The jump in Canadian crude oil shipments to Asia follow disruptions at U.S. refineries that typically use Canadian oil.
PBF Energy’s refinery at Chalmette, Louisiana, has closed its diesel-producing unit after a fire at the facility on Saturday, sources told Reuters earlier this week.
In addition, some refineries are still recovering from the Winter Storm Elliott at the end of December—on Christmas Eve, as much as 1.5 million barrels per day (bpd) of the U.S. Gulf Coast’s refining capacity was shut down due to the freezing temperatures.
Suncor Energy, for example, has said that it would shut down its Commerce City refinery in Colorado for as long as three months to repair equipment damaged by the “extreme and record-setting weather” just before Christmas.
Lower refining capacity utilization and rising crude oil prices have driven U.S. gasoline prices higher in the past few weeks.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.