Heavy Crude Discount Swings Wildly on Global Chaos

The WCS-WTI price gap swung from a five-year low to its widest since 2024, driven mostly by geopolitics.

24 Jul 2026

Canadian heavy crude's discount against US benchmark West Texas Intermediate has whipsawed through 2026. It moved from levels not seen since before the pandemic to some of the widest spreads in over two years, and the swings trace back mostly to global events rather than domestic pipeline capacity. Western Canadian Select for delivery at Hardisty, Alberta traded as tight as roughly $11 a barrel below WTI in June before widening back out to nearly $15 by early July, as conflict involving Iran disrupted shipping through the Strait of Hormuz and Chinese demand for heavy crude softened.

Forecasts had not prepared anyone for this. The Alberta Energy Regulator's own long-term outlook projected the differential to average around $11 a barrel in 2025, widening modestly to roughly $12 in 2026 as production kept rising. Near-term geopolitical volatility has overshot that baseline in both directions this year.

Enverus head of research Al Salazar has pointed to the US benchmark itself as the primary driver, not Canadian supply conditions. He noted that when WTI is volatile, WCS is just along for the ride.

Structural forces still work in the discount's favor over the medium term. The Trans Mountain Pipeline Expansion, in full commercial service since 2024, added meaningful export capacity to Pacific markets and has kept the differential considerably narrower than pre-2024 levels, when bottlenecks routinely pushed the discount above $18 a barrel. Seasonal asphalt demand for heavy crude during warmer months adds another layer, periodically tightening the spread each spring and summer.

For producers and refiners, the swings are a reminder of how exposed Canadian heavy crude pricing remains to events far outside the country's control. New export infrastructure is gradually shrinking the structural discount, but with additional pipeline capacity still years away, analysts expect the differential to stay more sensitive to global shocks than to any near-term shift in Canadian output.