Page 4 - NorthAmOil Week 06 2022

NorthAmOil COMMENTARY NorthAmOil

Canadian oil exports via Gulf

Coast reach record highs

Canadian producers are reported to have exported record crude volumes

from the US Gulf Coast at the end of 2021 but continue to face some

pipeline capacity constraints

NORTH AMERICA CANADIAN oil producers are reported to have mark an increase from around 70,000 bpd in
exported record levels of crude via the US Gulf 2019 and 2020, and higher export volumes are
WHAT: Coast at the end of 2021. This uptick comes as a expected to persist over the course of this year.
Canadian producers result of new takeaway capacity that started up The rise at the end of the year follows the
exported record volumes last year, allowing more oil to flow from Alber- start-up of additional pipeline capacity from
from the US Gulf Coast at ta’s oil sands to the Gulf Coast. While most Canada to the US. In October, Enbridge
the end of 2021. Canadian oil exports still go to the US, a grow- brought its Line 3 replacement into service,
ing number of barrels is transiting the country roughly doubling capacity on the pipeline to
WHY: before being shipped elsewhere – mainly to 760,000 bpd. Then in December, the Capline
New takeaway capacity Asia. pipeline from Louisiana to Illinois was reversed
has helped boost flows Despite this rise in Canadian exports from to allow crude to flow from the Midwest to the
via the Gulf Coast. the Gulf Coast, though, pipeline capacity con- Gulf Coast instead. The Capline reversal added
tinues to act as a constraint, preventing volumes about 200,000 bpd of crude pipeline capacity,
WHAT NEXT: that take this route out of North America from opening up opportunities to send additional oil
Despite this, pipeline expanding more rapidly. And this will likely being shipped from Canada to the Midwest on
capacity limitations remain unchanged until the Trans Mountain to the Gulf Coast.
continue to act as a oil pipeline expansion to Canada’s West Coast The additional flows of Canadian crude to the
constraint on export enters service. Gulf Coast come at a time when oil sands pro-
growth. duction is also at record highs, having reached
Gulf Coast route 3.5mn bpd. Meanwhile, overseas demand is
Canadian oil exports from the US Gulf Coast higher – driven in part by the loss of Venezue-
averaged more than 180,000 barrels per day lan barrels owing to years of underinvestment
during the whole of 2021. In December, they and US sanctions – as well by a recovery from
reached a record high of nearly 300,000 bpd, the initial waves of the coronavirus (COVID-
Reuters cited Kpler’s lead oil analyst for the 19) pandemic. Those Canadian barrels that
Americas, Matt Smith, as saying. The figures are being exported from the Gulf Coast are

Enbridge’s Line 3
replacement came
into service in October
2021.
Source: The Canadian
Press

P4 www. NEWSBASE .com Week 06 10•February•2022