(Jan 26): Canadian crude shipments to Asia are set to surge to the highest in more than a year as US refinery outages force producers to find new outlets for their oil.

At least seven million barrels of heavy-sour crude produced in Canada’s oil sands have been sold to Asian buyers for February loading, according to people familiar with the matter. That’s the most since January 2022, Vortexa data shows. 

Unipec, the trading arm of China’s biggest state-owned oil refiner Sinopec, will take three million barrels, while PetroChina Co. and Indian refiner Reliance Industries Ltd will each receive two million, said the people, who asked not to be named discussing confidential matters. Another one million barrels were sold to Repsol SA for Europe, the people said. 

The purchases come after fires at two US refineries forced them to halt production, eliminating outlets for Canadian oil. BP Plc’s BP-Husky Toledo refinery in Ohio isn’t expected to return to service before late in the second quarter, while Suncor Energy’s Commerce City facility in Colorado is shut until later this quarter. Together they consume an average of three million barrels of Canadian oil per month. 

Cold Lake crude from Alberta was being offered in the export market at about US$22 a barrel below the ICE Brent benchmark for loading on the US Gulf Coast, traders said. The same grade for domestic consumption traded at a US$14.85 discount to WTI on the Gulf Coast, 40 cents stronger than Tuesday, data show.