Canadian crude flows to US midcontinent intact post-TMX

Refiners in the US midcontinent continue to get ample supply of Canadian crude, even after the 590,000 b/d Trans Mountain Expansion (TMX) opened up an alternative outlet for oil sands producers.

An average 2.9mn b/d of Canadian crude flowed into the US midcontinent in July, marking the highest ever rate for the same month in data going back to 1993, according to the US Energy Information Administration (EIA) this week. This is up by about 140,000 b/d compared to the prior five-year average for July.

Canada's TMX pipeline went into service on 1 May, but volumes were already being drawn westward in April with the new line requiring roughly 4.4mn bl of linefill. The Trans Mountain system, now at a capacity of 890,000 b/d, opened a new frontier for oil sands operators as they target Pacific Rim markets via the Westridge Marine Terminal in Burnaby, British Columbia.

That prospect suggested refiners in the US midcontinent and Gulf coast — that have healthy diets of cheap Canadian crude — may be challenged in supplying their units. But repeated delays in TMX's construction meant upstream production had time to grow higher by the time the line finally went into service. Competing Enbridge provides the largest service to the US midcontinent and beyond with its 3.1mn b/d Mainline system, which the company says was still oversubscribed in the second quarter and the continued demand to ship crude south and east has Enbridge considering yet another expansion that could be in place by late 2026.

Flows into the US Gulf coast slipped to 512,000 b/d in July, down by 66,000 b/d compared to the prior five-year average for the same month. This still represents a nine-month high for the region and comparable to the 517,000 b/d in July 2023 and a signal that Canadian flows are largely intact since TMX was commissioned.

Trans Mountain said in September it moved 704,000 b/d in June, the latest official figure, with slightly more than half of that sent through the Westridge Marine Terminal for export.

The US west coast is among the destinations benefitting from the added Canadian supply, taking a record 498,000 b/d in July. This is double the typical volume for this time of year as it has displaced other foreign crudes and disrupted trade flows in the Pacific.

All told, the US imported 4.37mn b/d of Canadian crude in July, also a new record after surpassing the previous high of 4.35mn b/d set in November last year.

By Brett Holmes