The White House is now completely stunned! With Chinese refineries unable to purchase Venezuelan crude oil, they are rapidly turning to Canada—and coincidentally, Canada is struggling to find buyers for its oil.

Let’s rewind to January 2026: the U.S. maritime blockade against Venezuela abruptly halted approximately 500,000 barrels per day of heavy crude oil that had previously flowed to China. But the White House clearly underestimated the adaptability of Chinese refineries: oil tankers loaded with Canadian “Western Canadian Select” (WCS) crude departing from Vancouver on Canada’s west coast take only 17 days to reach Qingdao—whereas Venezuelan crude, due to its circuitous shipping route, requires a full 57 days to arrive. Even more crucially, Canadian heavy oil closely resembles Venezuelan crude in physical and chemical properties—it is similarly high-viscosity and high-sulfur. This means Chinese refining facilities require virtually no major retrofitting; the switch can be implemented almost seamlessly—“plug-and-play.” Data often speaks louder than words: the Trans Mountain Expansion (TMX) pipeline project was completed in May 2024, boosting its daily throughput capacity to 890,000 barrels. Current shipping data shows that as much as 64% of the crude transported via this pipeline is destined for China. In other words, the TMX pipeline alone—by volume—can not only fully offset the supply gap left by Venezuela’s cutoff but also deliver a significant surplus. According to maritime industry records, since early January, Chinese refineries’ inquiries for Canadian crude have surged explosively. An informed trader revealed just how red-hot the market has become: "Customers don’t even ask whether it’s available—they only ask, ‘How soon can it arrive?’" Now shift focus to Canada: the country has long found itself in an awkward position—“sitting on a golden rice bowl yet begging for food.” With proven oil reserves of 171 billion barrels—the world’s third-largest—it has long suffered “price bullying” from its southern neighbor, the United States. Due to a lack of diversified export routes, 97% of Canada’s oil exports flow exclusively to the U.S., depressing the price of Western Canadian Select crude—often $8–$50 per barrel below the U.S. benchmark. At peak differentials, each barrel sold incurred losses exceeding the cost of a premium hotpot meal. The root cause is straightforward: nearly all of Canada’s export pipelines run southward. Eastbound energy infrastructure projects were vetoed by Quebec Province; the long-anticipated Keystone XL pipeline was scrapped outright by the Biden administration; only the Trans Mountain pipeline—a route to the Pacific coast—was finally expanded and completed in 2024, offering Canada its first real breathing room. It’s like owning a gold mine but, because there’s no road out, being forced to sell the gold at scrap-metal prices to the sole scrap dealer in the village. Now, suddenly, a massive, price-agnostic buyer emerges across the Pacific—one willing to pay international market rates. How could Canada possibly contain its elation?

[International Oil Price Watch] What factors drove mixed gains and losses in international crude oil futures prices on February 4?

On February 4, international crude oil futures prices moved in opposite directions, primarily driven by market concerns over potential U.S. “maximum pressure” measures against Iran and developments surrounding Trump’s tariff policies. Prior to meeting Israeli Prime Minister Netanyahu, Trump signed a presidential memorandum directing the U.S. Treasury Secretary to impose “maximum economic pressure” on Iran—including sanctions and enforcement mechanisms. Earlier in the session, crude prices came under pressure after new 10% U.S. tariffs on Chinese imports took effect on Tuesday; China responded with retaliatory tariff measures. Peter Navarro, Trump’s trade advisor, previously stated that leaders of China and the U.S. would hold talks—hinting that the tariff hikes might be postponed. WTI crude futures for March 2025 delivery fell USD 0.46 per barrel (−0.63%), settling at USD 72.70 per barrel; Brent crude futures for April 2025 delivery rose USD 0.24 per barrel (+0.32%), settling at USD 76.20 per barrel. The Brent-WTI spread stood at USD 3.50 per barrel, widening by USD 0.70 per barrel from the previous day. Shanghai crude futures were closed for trading. Murban crude futures rose USD 0.43 per barrel (+0.6%), settling at USD 78.37 per barrel, with total contract volume reaching 104,314 lots. In Singapore, gasoline, diesel, jet fuel, and low-sulfur fuel oil (LSFO) crack spreads stood at USD 5.86/bbl (−USD 1.49), USD 13.93/bbl (−USD 0.45), USD 14.50/bbl (−USD 0.35), and USD 5.37/bbl (−USD 0.29), respectively.

Canadian Oil at Widest Discount to US Prices Since 2018

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Canadian heavy crude prices hit their widest discount to US benchmarks since 2018 due to high tanker rates and Venezuelan competition, impacting producers like Imperial Oil. The gap is expected to persist through the fourth quarter despite global prices exceeding $100 per barrel.

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