On Wednesday, Aug. 28, the National Energy Board (NEB) became the Canada Energy Regulator (CER). For further information please visit our Implementing the Canadian Energy Regulator Act information page

Canadian Refinery Overview 2018 – Energy Market Assessment

Crude Oil Pricing its Impact on Canadian Refineries

Canada imports crude oil even though it produces more crude oil than it processes in its refineries. This is because of the locations of the refineries and the type of crude oil that is produced in Canada. As a result, some refineries process both domestic and imported crude oil. Canadian refineries that process imported crude oil are exposed to global crude oil prices which are higher at times than North American prices. Between 2000 and 2010, West Texas Intermediate (WTI), which is the benchmark price for North American crude oil, averaged $1.40/bbl higher than the price for Brent, which is the international benchmark price. (Figure 4)

In 2011 and 2012, rising crude oil production in the U.S. and limited export access for North American crudes caused the price of WTI to be much lower than Brent. The differential averaged almost US$17/bbl, and reached as high as US$27/bbl in September 2011.

Figure 4: Spot Price of West Texas Intermediate and Europe Brent

Figure 4: Spot Price of West Texas Intermediate and Europe Brent

Source: Energy Information Administration

Description:

This chart shows the price of WTI and Brent and the differential between 2000 and August 2017. Between 2000 and 2010, WTI averaged $1.40/bbl higher than the price for Brent. In 2011 and 2012, rising crude oil production in the U.S. and limited export access for North American crudes caused the price of WTI to be much lower than Brent. The differential averaged almost US$17/bbl, and reached as high as US$27/bbl in September 2011.

 

Refineries in Ontario, Quebec, and Atlantic Canada which import light crude oil priced at Brent, saw their crude oil costs rise compared to those refineries in western Canada and the U.S., with access to less expensive, western Canadian or midcontinent North American crude oil.

A worker with red hard hat poses on an access bridge in a refinery.

Date modified: