CALGARY - According to analysts at CIBC, Alberta's heavy crude is expected to see a wider discount this year, primarily influenced by U.S. plans aimed at revitalizing Venezuela's struggling oil industry. The bank forecasts that the differential between Western Canada Select (WCS), the heavy Alberta blend, and West Texas Intermediate (WTI), the U.S. light oil benchmark, will average US$14.25 per barrel in 2026.

In contrast, the price differential for 2025 was recorded at an average of US$11.30 per barrel. This earlier rate was supported by the full operational year of the Trans Mountain pipeline expansion, which enabled increased oil exports to Asia from Canada. The expansion is seen as a significant factor in improving Canadian producers' fortunes during that period.

Both Venezuelan crude and Alberta oilsands crude are characterized by a heavy, tar-like consistency, necessitating specialized refining equipment to convert them into useful products like gasoline and diesel. Notably, refineries located on the U.S. Gulf Coast are configured to process this type of heavy oil. As a result, a substantial increase in Venezuelan oil supply could lead to heightened competition for imports from Alberta, potentially exerting downward pressure on WCS prices.

Amid these developments, the price of WTI has seen a rise of nearly three percent, trading at approximately US$61 per barrel during midday sessions. This upward movement in the price of light crude reflects ongoing market dynamics affecting North American oil production and pricing strategies.

This forecast, released on January 13, 2026, emphasizes the competitive nature of the U.S. oil market and the influence of external factors on Canadian crude pricing. Analysts are closely monitoring these trends, especially given the historical volatility in oil markets.

Lauren Krugel, The Canadian Press