The Western Canadian Select (WCS) price spread to WTI at Cushing has more than quadrupled in the last year, climbing from ~$5/bbl a year ago to ~$26 in mid-October. WCS trading at a discount to WTI is not unusual. However, the spread is lagging the $5–10/bbl average over the last two years. Several factors explain why WCS isn’t keeping pace with WTI amid global supply disruptions.
East Daley Analytics’ Crude Hub Model shows Canadian crude export infrastructure operating with limited spare capacity as of June 2026. Trans Mountain Pipeline transported ~866 Mb/d, or 97% of its 890 Mb/d nameplate capacity. The Enbridge (ENB) Mainline delivered ~3.05 MMb/d into Lakehead, while Keystone operated at roughly 96% of its 610 Mb/d nameplate.
The start of the Trans Mountain expansion (TMX) in 2024 gave Canada’s producers headroom to grow and relieved pressure on WCS prices. But two years on, operators have largely filled that project. With existing export routes operating near capacity, Canadian producers have limited flexibility to redirect additional barrels to other markets. Planned expansions to the Enbridge Mainline and Trans Mountain could provide relief in 2027, but offer little immediate help in addressing the current price dislocation.
US imports of Venezuelan crude is another factor. Venezuelan imports have increased through 2026, creating competition for Canadian heavy barrels at Gulf Coast refineries. As more Venezuelan crude enters the market, refiners have additional supply options, potentially putting downward pressure on WCS prices.
Elevated international tanker freight rates add another layer of pressure to Canadian heavy crude economics. According to Reuters, shipping crude from the US Gulf Coast to Asia now costs ~$40/bbl, compared with $8.60/bbl before the war. Freight costs to Europe have also increased sharply, from $4/bbl to $24.50.
Higher transportation costs weaken the economics of exporting heavy crude from the US Gulf Coast, potentially leaving more Canadian and competing heavy barrels reliant on US refinery demand. This reduces the ability of international markets to absorb surplus supply and puts additional pressure on Canadian heavy crude values.
While the WCS-WTI differential shown above is measured at Cushing, weaker Gulf Coast heavy crude economics can influence upstream crude values through refinery demand, transportation costs and regional price relationships. The magnitude of that transmission depends on pipeline capacity and the economics of moving incremental barrels between markets.
See East Daley’s Crude Hub Model to learn more. The widening WCS discount reflects a combination of constrained Canadian export capacity, increasing competition from Venezuelan heavy crude, and elevated international tanker freight costs. Together, these pressures are limiting the ability of Canadian barrels to access alternative markets despite broader global crude supply disruptions.
The next question is what reverses the dislocation. Lower tanker freight rates, additional Canadian pipeline capacity or stronger demand for Canadian heavy barrels could help narrow the differential. However, the planned Trans Mountain and Enbridge expansions are not expected to provide additional capacity until 2027. Until one or more of these constraints eases, Canadian heavy crude is likely to remain under pricing pressure relative to WTI. – Keland Rumsey Tickers: ENB.
One Market, One Model: Gain a Holistic View of North America Supply & Demand
East Daley Analytics is pleased to announce the Canada Supply & Demand report. The Canada S&D completes our North American model, providing a fully integrated supply and demand forecast for crude oil and natural gas. East Daley follows molecules from Canadian production through US infrastructure to end-markets. Clients now have a continental view to anticipate trends, from how Canadian gas is reshaping Midwest markets, to how crude imports flow to Gulf Coast refiners. The Canada S&D report and dataset is available exclusively in Energy Data Studio. Reach out to learn more about East Daley’s North American energy model.
The Daley Note
Subscribe to The Daley Note for energy insights delivered daily to your inbox. The Daley Note covers news, commodity prices, security prices and EDA research likely to affect markets in the short term.