Heavy sour Canadian crude exports are likely to expand further into the Asia-Pacific market in 2026 as Canadian output increases and US west coast refinery closures weaken US demand.
Around two-thirds of all Canadian crude exports from the 890,000 b/d Trans Mountain pipeline system were destined to Asia-Pacific year-to-date November 2025, with the balance heading to the US west coast.
Just over three-quarters of the 375,000 b/d of Canadian heavy crude exports from Vancouver were destined to Asia-Pacific year-to-date November 2025, according to data from analytics firms Vortexa and Kpler. The balance out of the Trans Mountain system headed to the US west coast. This is up from a roughly 60/40 split in the second half of 2024 following the 540,000 b/d Trans Mountain Expansion (TMX) startup in May of that year. US west coast customers received 80,000 b/d of heavy sour Canadian crude during the first 11 months of 2025, 25pc less than the second half of 2024. This is despite total heavy exports from Vancouver averaging 27pc higher this year so far.
Heavy crude exports are expected to keep growing in 2026 as increased western Canadian production meets limited southbound pipeline capacity to the US. In January 2026, Canadian pipeline operator Enbridge rejected 13pc of heavy and light crude nominations on its 3.1mn b/d Mainline to the US as Alberta production surges in the colder months. But the Trans Mountain system has accepted all crude nominations since TMX came on line in May 2024 and the system has room to export more crude. Trans Mountain reported that the pipeline ran at 87pc capacity in the third quarter of 2025.
Canadian crude and condensate production is projected to average a record-high of 4.85mn b/d in 2026, 80,000 b/d above 2025 levels, according to Argus Consulting, a division of Argus Media.
China thirst for heavy grows
Any increase in exports is expected to head towards the Asia-Pacific region, specifically China. Chinese interest in heavy crude is expected to grow next year as refineries bring on line increasingly advanced cracking units to improve petrochemical yields. This increase in petrochemical output will come at the expense of road fuels, as rising electric vehicle use and low construction-sector activity hit Chinesegasoline and diesel demand. Heavy Canadian crude tends to be the most competitively-priced, unsanctioned option for Chinese refiners.
Asia-Pacific buyers more generally have sought Canadian heavy crude as a substitute for restrained supplies of heavy sour Venezuelan Merey and Arab Heavy. Saudi Arabia's state-owned Saudi Aramco may be keeping more heavy crude for refining, while market confidence in Merey supply is weak following a US seizure of an oil tanker off the coast of Venezuela on 10 December and the US declaring a blockage on Venezuela exports on 16 December.
Meanwhile, shipments of Arab Heavy have dropped by 280,000 b/d to around 560,000 b/d this year, according to Vortexa data.
As Asia-Pacific interest in Canadian crude continues to grow, US west coast demand will continue to fall. On the heels of Phillips 66 closing its 139,000 b/d Los Angeles, California, refinery, Valero is likely to shutter its 145,000 b/d Benicia refinery near San Francisco in April 2026. Valero is evaluating alternatives for its 85,000 b/d Wilmington refinery in Los Angeles. At the start of 2025, these three refineries made up 23pc of Californian refinery capacity, and combined took 30,000 b/d of Cold Lake during January-June 2025, according to EIA data.
As available Canadian crude supplies grow, the ability to fully load Aframax vessels at the Westridge Marine Terminal in British Colombia will allow increased volumes to be exported. Dredging at the terminal is set to be completed by late 2026 or early 2027. Draft restrictions limit most Aframax vessels to around 550,000 bl at the terminal for heavy crude, and 600,000 bl for some lighter crudes. Post-dredging, those same ships could carry around 700,000-750,000 bl.
In the long term, Trans Mountain is looking to boost pipeline flows to meet the increased shipping capacity, including the use of drag-reducing agents that should add another 85,000-90,000 b/d by 2027 to pipeline capacity, according to Trans Mountain.
