TMX pull on Canadian crude stronger than US Gulf

Spanish Market: Crude oil, Oil products
21/10/26

Exporting Canadian crude through the 890,000 b/d Trans Mountain (TMX) pipeline system is more profitable for shippers compared to alternative routes into the US, as ample Latin American supply weighs on Western Canadian Select (WCS) Houston.

December-injection cargoes of high-TAN Canadian heavy crude traded around a $13.33/bl discount to December CMA Nymex fob Vancouver over 5-19 October, around a $14/bl premium to assessments for high-TAN crude at the start of TMX in Edmonton, Alberta. This is the widest spread between the prices for a single cycle since the 540,000 b/d Line 2 Expansion came online in May 2024.

This wide premium between selling the same crude at Edmonton and Vancouver implies strong profit margins for shippers on TMX, given current interim tariffs for committed shippers to ship heavy crude to the Westridge terminal in Vancouver range from $7.70/bl to $9.13/bl. This assumes fixed and full variable costs are paid. If variable costs are lower, then shipping margins widen. Making larger minimum commitments to ship on pipelines means operators are often willing to offer lower shipping tolls.

Historically, Canadian shippers looked to maximize exports to the US Gulf coast as refiners there have strong demand and high refining margins for heavy crude. Argus Consulting estimates the US Gulf runs around 1.7mn b/d of coking capacity — more than double the second-highest global region in China. But with the breakout of the Iran war and the return of Venezuelan barrels, the arbitrage from Alberta to the US Gulf has been challenging for most shippers and TMX crude has become the premium export route.

Heavy sour WCS in Houston, Texas, averaged around a $17/bl discount to December CMA Nymex over 5-19 October, or around an $8.74/bl premium to November-delivery WCS at Hardisty, Alberta, over the same period. Tariffs to ship heavy crude from Hardisty to the US Gulf coast range from $8.68-$9.85/bl, leaving the journey profitable only for shippers with the largest commitments and closed for most uncommitted shippers.

Strait constraints

Asia-Pacific markets have borne the brunt of pain from disruptions to crude flow through the strait of Hormuz, and refiners there have been scrambling for alternative crudes. Asian buyers have generally been willing to pay up for heavy sour Canadian TMX crude, despite quality concerns.

Reduced supply of Iranian barrels has also forced independent Chinese refiners, mostly based in Shandong province, into the market and seen fob prices skyrocket. Some traders noted the profitable shipping economics on TMX have increasingly drawn in uncommitted shippers who pay the highest tolls.

Canadian barrels out of Vancouver also offer a comparatively short haul option of around three weeks to ship to China, compared to six weeks for most Atlantic basin grades. TMX barrels have benefited from a reliability factor, given elevated tension in the Mideast Gulf and infrastructure issues that plague rival Latin American heavy producers such as Ecuador, Mexico and Venezuela.

And despite the recent doubling of freight costs, Pacific basin demand for TMX crude has remained robust throughout the war. High shipping costs have also helped to keep Venezuelan and Colombian heavy crude in the Atlantic basin.

Canadian heavy crude differentials have generally widened through the November trading cycle, with bellwether WCS at Hardisty averaging around a $25.70/bl discount to November CMA Nymex over 5-19 October, the widest since November 2023. Argus Consulting forecasts record fourth quarter crude and condensate production of 5.15mn b/d, straining the Canadian pipeline export system. Enbridge rejected 16pc of heavy crude nominations on its 3.1mn b/d Mainline for November, up from 4pc in October, which signals a tight egress environment despite historically low Canadian heavy crude differentials.

By John Cordner and Matthew LaFrance

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22/10/26

EU parliament wants three-year delay to methane law

Brussels, 22 October (Argus) — The European Parliament today called for a three-year delay to monitoring, reporting and verification (MRV) obligations for importers under the EU's 2024 methane emissions regulation (MER), after the European Commission earlier this month proposed a one-year postponement. Parliament voted by a clear majority of 341 votes in favour, 225 against and six abstentions, signalling strong support for the three-year delay when negotiations on the final legal text start with EU member states. If adopted into law, parliament's proposal would also give crude, natural gas and coal importers until 31 May 2031 to ensure their supply contracts meet EU-equivalent MRV standards. EU producers and importers would also be required to report the methane intensity of their fossil fuels sold on the EU market by 5 August 2031, rather than by 5 August 2029 as earlier proposed by the commission. Parliament does not want to extend the proposed delay to imports from countries under EU sanctions. Parliament adopted its position under an urgency procedure. If no legal text is formally adopted before the end of 2026, MRV rules would automatically apply from 1 January 2027 for oil, gas and coal importers. Earlier this month, EU energy commissioner Dan Jorgensen urged parliament and EU member states not to make " other " demands for changes to the regulation. The three-year delay is an "absolute scandal", said German Green MEP Jutta Paulus, parliament's lead negotiator on the 2024 methane regulation. "It is utterly incomprehensible that, in the midst of an energy price crisis, gas should be needlessly flared or allowed to vent into the atmosphere," Paulus said. Oil and gas producers' association IOGP Europe called on EU states to follow parliament's lead and ensure a level playing field for domestic producers. A "rigid" one-year delay, as proposed by the commission, would only bring the industry back to the same situation 12 months later, IOGP said. Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

'Real PdV' to appoint new Citgo board: Attorney

21/10/26

'Real PdV' to appoint new Citgo board: Attorney

Houston, 21 October (Argus) — Venezuela's state-owned oil company PdV is working to appoint a new board of directors for US refiner Citgo and its parent company PdV Holdings, a lawyer for the company said today. "The real PdV authorities are working to effectuate their appointment" of a new board of directors to PdV Holdings and Citgo, attorney Katherine Wellington said at a hearing of the US Court of Appeals for the Third Circuit in Philadelphia, Pennsylvania. "US recognition of President [Delcy] Rodriguez's government means that that the real PdV authorities now appear before this court." The court is hearing challenges from Venezuela, PdV and other parties to the choice of Elliott Investment Management affiliate Amber Energy's $5.9bn bid as the winner in the pending auction. It covers Citgo's three US refineries, its lubricant plants and midstream and retail assets to satisfy debt defaults and expropriations owed by PdV Holdings. Amber's bid included a separate agreement to settle litigation claims with 75pc of a group of PdV bondholders for $2.13bn. The situation in Venezuela has taken a sharp turn since a US federal judge in November affirmed Amber's bid as the winner. The US ousted former president Nicolas Maduro on 3 January, subsequently lifted sanctions on Venezuela's oil exports and recognized interim president Delcy Rodriguez's government in March. Although the US recognizes the Rodriguez-led government, Washington has yet to allow the Caracas-based PdV to reassert control over Citgo which has operated under a board appointed by the Venezuelan opposition and vetted by the US government since 2019, after the US rejected Venezuela's 2018 presidential election as illegitimate. The US Treasury Department on 14 September updated a general license that in January set out conditions for PdV's oil sales and business transactions with the US and other companies. It added an explicit prohibition against changing the governing structure of Citgo and its parent companies PdV Holding and Citgo Holding. The US administration earlier this month declined to give the appeals court a comment on the Citgo case after a third request from the court for the US to weigh in. The US "has no views to express at this time concerning this litigation", the Department of Justice said in a 13 October filing. The hearing on Wednesday examined various issues in the Citgo case including whether the lower court had authority to conduct the auction, the valuation of Citgo and alleged conflicts of interest of court-appointed special master Robert Pincus and his advisors. Pincus has refuted the conflict of interest allegations and the lower court rejected motions to remove him. Wellington joined the Citgo case in August after previous lawyers for PdV withdrew from the case. They cited a directive from the general legal counsel for PdV Alejandra Torrealba to refrain from acting on behalf of PdV before US courts, according to documents filed to the US Court of Appeals for the Third Circuit. The Citgo sale is also subject to regulatory approvals, including by the US Treasury Department's Office of Foreign Assets Control. Citgo owns and operates three US refineries — the 471,000 b/d Lake Charles refinery in Louisiana, the 165,000 b/d Corpus Christi plant in Texas and the 188,000 b/d Lemont refinery in Illinois. By Eunice Bridges Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

New York diesel falls on DOE reserve loan

21/10/26

New York diesel falls on DOE reserve loan

Houston, 21 October (Argus) — The US Energy Department's offer to loan 315,000 bl from the Northeast Home Heating Oil Reserve (NEHHOR) pressured New York diesel markets on Wednesday, easing some concerns over near-term supply availability ahead of the winter heating season. The offer seeks to loan out nearly a third of NEHHOR supplies , which consist of 1mn bl of ultra-low sulfur heating oil held in leased commercial storage tanks in Portland, Maine; Boston, Massachusetts; and New Haven, Connecticut. The deliveries, scheduled to be completed by 13 November, are intended to bolster regional fuel supplies as inventories remain historically tight. The announcement sparked a bearish reaction in the New York Harbor distillates market. Buckeye ultra-low sulphur diesel (ULSD) for prompt delivery traded at a 3¢/USG premium to November Nymex, pulling cash differentials down by 4¢/USG from Tuesday's levels to their lowest midpoint in four weeks. Market participants view the reserve loan as an additional source of supply for the northeast US, reducing some of the scarcity premium that had been supporting diesel values. Falling futures prices added to the pressure on cash markets. The November Nymex ULSD contract fell by nearly 16¢/USG at around noon ET Wednesday, accelerating losses in physical markets. Buckeye cash ULSD values were on track to settle near $4.79/USG, the lowest level in two weeks. Even after the decline, prices remained more than double year-earlier levels of $2.22/USG. Rising inventories also weighed on prices. ULSD and ultra-low sulphur heating oil (ULSH) stocks in the US central Atlantic coast region, which includes the New York Harbor market, rose by 1.3mn bl last week to 9.8mn bl, according to Energy Information Administration (EIA) data released Wednesday. Still, inventories remain historically low, with regional stocks more than 19pc below the 12.1mn bl held during the same week last year. That suggests the market could remain vulnerable to supply disruptions, cold-weather demand spikes, or logistical constraints later this winter, despite the recent increase in available supplies. By Craig Ross Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

New climate plans will not reach Paris targets: Unep

21/10/26

New climate plans will not reach Paris targets: Unep

London, 21 October (Argus) — Countries have submitted more than 100 new climate plans in the past year, but these will not deliver the greenhouse gas (GHG) emissions cuts required to reach global warming limits set out in the Paris climate agreement, the UN Environment Programme (Unep) said today in its Emissions Gap 2026 report. If current policies continue, there is a 66pc chance that global warming will reach 2.8°C by 2100, and increase after that, Unep found. The most optimistic scenario would limit warming to 2.1°C this century, but it relies on all climate plans — known as nationally determined contributions (NDCs) — being achieved and "similar efforts maintained", Unep said. The Paris agreement seeks to curb the global rise in temperature to "well below" 2°C above pre-industrial levels, and pursues a 1.5°C limit. A total of 124 countries, accounting for around 76pc of global GHG emissions, had submitted new NDCs as of 1 September, Unep said. This is up from 57 submissions covering 63pc of global emissions last year. The most recent round of NDCs would only cut global GHG emissions to 5-8pc below 2025 levels by 2030, Unep said. They would reduce GHGs by 11-15pc by 2035 and by 20-27pc by 2040, from the 2025 baseline, it added. The range refers to the conditionality of the NDCs — whether countries will implement the plans with no outside help or whether they need external technical and financial support. There is a "large and expanding emissions gap" of 5bn t/CO2 equivalent (CO2e) in 2030 and of 16bn t/CO2e in 2035 between the "full implementation of current conditional and unconditional NDCs and the lowest 1.5°C overshoot scenario", Unep said. The emissions gap refers to the distance between projected emissions from countries' NDCs and the reduction needed to hit Paris agreement goals. The gaps are 1bn t/CO2e and 5bn t/CO2e for 2030 and 2035, respectively, between NDCs and the "below 2°C scenario", Unep found. The gaps are wider if only unconditional NDCs are put into practice. But, owed to "decades of insufficient climate action", the world will overshoot the 1.5°C Paris goal , Unep said. "The opportunity to bridge the 1.5°C emissions gap with ‘no or limited' overshoot has been lost", it added. Unep cautioned that the emissions gaps outlined in this year's report "are not directly comparable with last year's report, which was benchmarked against scenarios that are now unachievable". There is an "unbridgeable gap" of 9bn t/CO2e between the lowest "overshoot" scenario and the level of emissions that would have met a 1.5°C target, it said. Global GHG emissions in 2025 stood at 58.4bn t/CO2e, with a range of 5.5bn t, preliminary data show, Unep said. This may be a decline on the year of 100mn t, but the "high uncertainty range" makes this difficult to conclude, Unep said. It does diverge from a decade-long trend of global emissions growth of 0.8pc/yr, Unep added. But CO2 emissions from fossil fuel combustion rose in 2025, with estimates ranging from an increase of between 0.4pc to 1.1pc on the year, Unep said. Countries agreed at the UN Cop 28 climate summit in 2023 to "transition away" from fossil fuels in energy systems. "Progress in transitioning away from fossil fuels and other emissions-intensive activities is lagging particularly far behind", Unep said. It expects the use of oil and gas to continue to increase this decade, but noted that "the implementation of current policies is set to trigger a peak and decline in coal before 2030". By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

No damage at Aramco Yanbu, Shaybah facilities: Source

21/10/26

No damage at Aramco Yanbu, Shaybah facilities: Source

Dubai, 21 October (Argus) — State-controlled Saudi Aramco facilities at Yanbu, on the Red Sea coast, and at the 1mn b/d Shaybah oil field in the southeast are undamaged, a source said, after the Yemen-based Houthi militant group said they were hit by missile and drone strikes on Monday. The Houthis said on Monday its attacks on Yanbu and Shaybah caused fires at both sites, a claim that moved the price of front-month Ice Brent crude futures above $110/bl for the first time since mid-May. The source said the claim was untrue, and that the facilities are intact. Yanbu is home to Aramco's 400,000 b/d Samref refinery joint venture with ExxonMobil, its 400,000 b/d Yasref refinery, its 243,000 b/d Yanbu refinery, and an export terminal that became Saudi Arabia's main crude outlet after the effective closure of the strait of Hormuz in early March. Saudi Arabia's conflict with the Houthis is escalating, with the militant group having widened the scope of its targeting from military and energy facilities to airports and Aramco's headquarters in Dhahran. Operations at King Khalid International airport in Riyadh were suspended for around a week following fatal missile strikes by the Houthis earlier this month. Saudi Arabia has been seeking international and regional military support against Houthi attacks. The UK said this week it would fly military missions to help protect Saudi infrastructure. French president Emmanuel Macron said in September that France would deploy "military means" to Saudi Arabia, without providing details. By Nader Itayim Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

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