Weight of Freight: TMX spurs new Aframax, VLCC trade in Pacific basin
The first three months of Canada's Trans Mountain Expansion (TMX) have sent a surge of crude to refiners in California and China, shifting tanker demand in the Pacific basin.
The 590,000 b/d TMX project nearly tripled the capacity of Trans Mountain’s pipeline system to 890,000 b/d when it opened on 1 May, linking Alberta's oil sands to Canada's west coast for direct access to lucrative Pacific Rim markets, where buyers are eager for heavy sour crude.
Between 20 May, when the first TMX cargo began loading, and 20 August, about 165,000 b/d of Vancouver crude exports landed at ports on the US west coast, primarily in California, up from about 30,000 b/d in that same span last year, according to data from analytics firm Kpler.
The freight rate for a Vancouver-US west coast Aframax shipment averaged $1.98/bl for Cold Lake between 1 May and 20 August. This ranged from a low of $1.50/bl from 1-3 May when shipowners repositioned to the region in anticipation of TMX to a high of $2.32/bl from 13-14 June, according to Argus data.
The new oil flow into the US west coast has displaced shipments from farther afield in Ecuador and Saudi Arabia. Crude exports from those countries into the US west coast averaged 110,000 b/d and 25,000 b/d, respectively, between 20 May and 20 August, down from 155,000 b/d and 135,000 b/d over the same stretch in 2023, according to Kpler.
The growth of the Vancouver market, which benefits from its proximity to California, has reduced tonne-miles, a proxy for tanker demand, into the US west coast. This has outpaced slightly lower crude demand, which fell in part due to Phillips 66 halting crude runs at its 115,000 b/d refinery in Rodeo, California, in February to produce renewable fuels, as well as weaker-than-expected road fuel demand this summer.
Tonne-miles for US west coast crude imports fell by 14pc to 106bn between 20 May and 20 August 2024 compared with the same period a year earlier, Vortexa data show, while overall crude imports declined just 8.6pc to 1.37mn b/d, according to Kpler.
PAL-ing around with VLCCs
Though much of Vancouver’s exports have been shipped to the US west coast, Canadian producers have found ready buyers in Asia-Pacific as well, where about 160,000 b/d of Vancouver exports went between 20 May and 20 August, compared with none a year prior, Kpler data show.Buyers and sellers have displayed a preference for using ship-to-ship transfers onto very large crude carriers (VLCCs) at the Pacific Area Lightering zone (PAL) off the coast of southern California, rather than sending Aframaxes directly to refineries in east Asia. Of the 30 Vancouver-origin Aframax cargoes that have landed in China, South Korea and India, 19 were transferred onto VLCCs at PAL, Kpler data show. Seven cargoes were sent directly to east Asia on time-chartered Aframaxes — the majority by Suncor — and just four were sent using spot tonnage, likely due to the expensive economics of trans-Pacific Aframax shipments.
The Vancouver-China Aframax rate between 1 May and 20 August averaged $5.90/bl, with a low of $4.94/bl from 19-20 August and a high of $6.41/bl from 1-10 May and again from 4-12 June, according to Argus data.
Over the same time, the cost to reverse lighter, or transfer, three 550,000 bl shipments of Cold Lake crude from Vancouver onto a VLCC at PAL averaged about $8.055mn lumpsum, or $4.92/bl, with a low of $4.35/bl from 8-13 August and a high of $5.45/bl on 22 May, according to Argus data. This includes $150,000 ship-to-ship transfer costs at PAL, 15 days of VLCC demurrage and three days of Aframax demurrage for each reverse lightering.
VLCC costs could change preferences
Though it may have been cheaper to load TMX crude on VLCCs at PAL since May, volatility in the VLCC market — which often falls to yearly lows in summer before climbing to seasonal highs in the winter — could entice traders to opt for direct Aframax shipments if VLCCs hit their expected peak in the winter.
VLCC costs for shipments from the US west coast to China are influenced by the VLCC markets in the Mideast Gulf and Brazil, where ships look for their next voyage after discharging on the US west coast.
For now, Vancouver-loading Aframax rates are under pressure from the reemergence of VLCCs in what had become an Aframax trade in Thailand, boosting Aframax supply in the Pacific and pulling the class’s rate to ship crude from Vancouver to the US west coast to its lowest level in more than three months on 19 August.
In mid-July, VLCCs resumed discharging via single point mooring (SPM) at Thailand's port of Map Ta Phut for the first time since January 2022, ship-tracking data from Vortexa show. Prior to the SPM's return to service, VLCCs could discharge cargoes only by lightering onto smaller Aframaxes, which would then unload at a different berth in the port.
This created demand for about eight Aframax lighterings each month, but with VLCCs in Thailand again able to discharge directly, that demand is effectively halted, putting downward pressure in the broader southeast Asia Aframax market.
Since July, two Aframaxes have left the southeast Asia market for Vancouver, according to ship tracking data from Kpler: the Eagle Brisbane, which previously was used in lightering operations at Map Ta Phut, and the Blue Sea, which recently hauled fuel oil from nearby Singapore to China.
Spotlight content
Related news
Opec+ members reaffirm commitment after UAE exit
Opec+ members reaffirm commitment after UAE exit
London, 29 April (Argus) — Algeria, Russia and Kazakhstan have reaffirmed their commitment to Opec+ after the UAE's decision to quit the alliance. The UAE said on 29 April it would withdraw from both Opec and the wider Opec+ group from 1 May, saying it wants greater freedom to respond to global oil demand in line with its national interest. The move has prompted speculation over the future cohesion of Opec and Opec+. The UAE's departure reduces the group's spare production capacity and may weaken its ability to manage supply and demand balances when the strait of Hormuz reopens. Algeria, the first Opec member to respond publicly, said it "consistently and firmly reaffirms its commitment" to Opec and Opec+, describing them as "essential frameworks for the stability of the global oil market". Russia, a leading member of the broader Opec+ alliance, said the group would continue its work to balance global energy markets. Kremlin spokesman Dmitry Peskov said Moscow still views Opec+ as an effective mechanism for managing market stability. "We still believe in Opec+ as a structure that helps balance the global energy markets. We hope that the structure will continue its work, and we will continue our contacts within this structure with our partners," Peskov said, according to state news agency Tass. Kazakhstan also said it had no plans to change its relationship with Opec+, according to the country's energy ministry. By Aydin Calik Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
France's fossil fuel roadmap a key step: think tanks
France's fossil fuel roadmap a key step: think tanks
Edinburgh, 29 April (Argus) — France's roadmap to transition away from fossil fuels, which combines energy policies and climate targets in one document, is an important step, even though no new goals were announced, energy and climate think tanks said today. France released the roadmap yesterday, during the first conference on Transitioning Away from Fossil Fuels, ongoing in Santa Marta, Colombia. The plan matches France's climate goals with its energy policies in one document, including its national low carbon strategy and its new electrification plan set out in April . It reiterates the country's goal to move from a share of around 60pc fossil fuels in final energy consumption in 2023 to 40pc in 2030 and 30pc in 2035, to reach net zero emissions in 2050. The government plans to phase out coal by 2030, oil by 2045 and natural gas by 2050, under its national low carbon strategy and its roadmap. "France is one of the few countries in the world to have such a precise schedule for a gradual exit from fossil fuels," the French environment ministry said. The French roadmap aims to inspire partner countries on long-term planning, it said. France's last two remaining coal-fired power plants are scheduled to close or be converted by next year. The roadmap also states that over 95pc of fossil fuels burned in the country are imported. France eyes a 50pc reduction in gross greenhouse gas (GHG) emissions by 2030 compared with 1990, to reach net zero emissions by 2050. Although the country did not announce new goals, the roadmap sends an important signal, think-tank International Institute for Sustainable Development (IISD) energy policy advisor Natalie Jones said. "Higher ambition and not solely repackaging existing policies would have been even better, but an explicit fossil fuel phase strategy, with timelines, is new and welcome," she said. She added that the framing of the roadmap in relation to UN Cop climate summits, the global stocktake and climate action is significant. The first global stocktake, agreed on in 2023 at Cop 28, called for a transition away from fossil fuels in energy systems. "Few countries tackle all fossil fuels together — this gives other countries a critical opportunity to follow suit, while fossil fuel-producing nations can also lay out plans to diversify their economies as global demand for fossil fuels wanes in the decades ahead," said global research organisation WRI director of international climate action David Waskow. Asked about whether other EU countries could release fossil fuel transition roadmaps in the future, EU climate commissioner Wopke Hoekstra yesterday said that whether roadmaps are "specifically about phasing out fossil fuels… is secondary to impact". He reiterated the EU's goals — net zero emissions by 2050 and a 55pc reduction for 2030, from 1990 levels — pointing out that the wording is about reducing emissions rather than specifically phasing out fossil fuels. The "reality is… the same, you cannot be at 90pc [of emission cuts] in 2040 if you will not radically phase out fossil fuels", Hoekstra said. The EU updated its climate law earlier this year to add a 90pc GHG reduction by 2040, from 1990 levels, although up to 5pc of the target can be met using international carbon credits. Fossil fuel producer Colombia also presented a draft fossil fuel transition roadmap this week, developed with researchers, and designed to act as a potential standard for other countries to use. It aims to achieve a 90pc reduction in primary fossil fuel demand over 2026-50, and a 90pc cut in "whole energy system emissions" from 2015-50, while expanding access to energy. The plan pointed to the country's dependence on fossil fuels for revenues. Colombia exports oil and coal worth $25bn, against around $1bn in fossil fuel imports — mainly oil products, according to the roadmap. By Caroline Varin and Lucas Parolin Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
US oil inventories fall on record exports: Update
US oil inventories fall on record exports: Update
Adds report details. Calgary, 29 April (Argus) — US crude inventories fell last week by 6.2mn bl with exports surging past 6mn b/d for the first time on record, the Energy Information Administration (EIA) reported today. Crude stocks in the week ended 24 April fell to 459.5mn bl, down from 465.7mn bl in the week prior. Stocks were higher by 19.1mn bl compared to the same week last year. Inventories at the Cushing storage hub in Oklahoma fell on the week by 796,000 bl to 29.8mn bl and were 4.1mn bl higher than a year earlier. Stocks in the greater US midcontinent region, including Cushing, rose by 569,000 bl from the previous week to 114.4mn bl. Crude exports rose to 6.44mn b/d, up by 1.64mn b/d from the week prior and the highest on record. The previous high of 5.63mn b/d was set in the week ended 24 February 2023. Imports fell by 328,000 b/d to 5.75mn b/d, marking the first time exports have exceeded imports into the US over the course of a week, according to EIA data going back to 2001. As a result, net imports dropped by 1.97mn b/d to -688,000 b/d. Crude inventories at the US Strategic Petroleum Reserve (SPR) fell by 7.1mn bl to 397.9mn bl, as part of a targeted 172mn bl drawdown announced last month. The withdrawal rate of 1.02mn b/d across the seven-day period ranks behind only six other weeks found between June and October 2022. SPR stocks are not included in the overall EIA commercial crude inventory figures. US crude production averaged 13.6mn b/d across the week, steady from a week earlier but 121,000 b/d higher than a year ago. Refinery runs nationwide fell last week by 94,000 b/d to 16.3mn b/d. Throughputs were down by 52,000 b/d compared to a year earlier. Refinery utilization rates averaged 89.6pc nationwide, up from both 89.1pc in the previous week and 88.6pc in the same week last year. By Brett Holmes US weekly crude stocks/movements Stocks mn bl 24-Apr 17-Apr ±% Year ago ±% Crude oil (excluding SPR) 459.5 465.7 -1.3% 440.4 4.3% - Cushing crude 29.8 30.6 -2.6% 25.7 15.8% Imports/exports '000 b/d Crude imports 5,750 6,078 -5.4% 5,498 4.6% Crude exports 6,438 4,798 34.2% 4,121 56.2% Refinery usage Refinery inputs '000 b/d 16,274 16,180 0.6% 16,326 -0.3% Refinery utilisation % 89.6 89.1 0.6% 88.6 1.1% Production mn b/d 13.6 13.6 0.0% 13.5 0.9% — US Energy Information Administration Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
US oil inventories fall on record exports: EIA
US oil inventories fall on record exports: EIA
Calgary, 29 April (Argus) — US crude inventories fell last week by 6.2mn bl with exports surging past 6mn b/d for the first time on record, the Energy Information Administration (EIA) reported today. Crude stocks in the week ended 24 April fell to 459.5mn bl, down from 465.7mn bl in the week prior. Stocks were higher by 19.1mn bl compared to the same week last year. Inventories at the Cushing storage hub in Oklahoma fell on the week by 796,000 bl to 29.8mn bl and were 4.1mn bl higher than a year earlier. Stocks in the greater US midcontinent region, including Cushing, rose by 569,000 bl from the previous week to 114.4mn bl. Crude exports rose to 6.44mn b/d, up by 1.64mn b/d from the week prior and the highest on record. The previous high of 5.63mn b/d was set in the week ended 24 February 2023. By Brett Holmes US weekly crude stocks/movements Stocks mn bl 24-Apr 17-Apr ±% Year ago ±% Crude oil (excluding SPR) 459.5 465.7 -1.3% 440.4 4.3% - Cushing crude 29.8 30.6 -2.6% 25.7 15.8% Imports/exports '000 b/d Crude imports 5,750 6,078 -5.4% 5,498 4.6% Crude exports 6,438 4,798 34.2% 4,121 56.2% Refinery usage Refinery inputs '000 b/d 16,274 16,180 0.6% 16,326 -0.3% Refinery utilisation % 89.6 89.1 0.6% 88.6 1.1% Production mn b/d 13.6 13.6 0.0% 13.5 0.9% — US Energy Information Administration Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.