Western Canadian Select

Crude-by-rail: Canadian volumes of crude oil exported by rail decreased by 9.5% from 36 million barrels in 2023 to 32 million barrels in 2024 due to higher costs in transportation and additional pipeline capacities.

Base Case Forecast for 2025 to 2034

Price differential: The WTI-WCS price differential is anticipated to average US$11.00/bbl in 2025 as TMX enters its first full calendar year of operation, increasing takeaway capacity and greater access to Pacific markets compared with 2024. Oil sands turnarounds in the first half of the year, which temporarily reduced bitumen production, also contribute to the relatively narrow differential. Despite this, increased volatility caused by U.S. trade policy uncertainty is expected. As uncertainty eases and production rises in 2026, the differential is expected to widen to US$12.00/bbl. The differential is anticipated to stabilize at US$13.00/bbl from 2027 onwards. Factors that could widen the differential (competition for U.S. Gulf Coast demand and increased supply of heavy crude oil globally) will be balanced by factors that narrow it (ample pipeline export capacity and access to Pacific markets).

U.S. Gulf Coast demand: Demand from the U.S. Gulf Coast is expected to decline slightly in 2025 due to the permanent closure of LyondellBasell’s Houston refinery. U.S. Gulf Coast demand for Canadian heavy crude is expected to remain stable in the long term.

Pacific region demand: With the commissioning of TMX in May 2024, Alberta’s producers will be able to market more of their heavy oil to U.S. West Coast and Asian refineries, accessing higher prices for their crude oil. The anticipated shutdown of Phillips 66’s Los Angeles refinery at the end of 2025 is expected to have a limited effect on TMX crude oil exports.

One-Year Tariff Scenario (Tariff Case)

Based on the tariff case assumptions outlined on the Prices and Capital Expenditures home page and the WTI page, the WCS price is expected to be 18% below the 2025 base case price forecast at US$45.00/bbl. The lower price is due to the 10% U.S. tariff on Canadian energy products, resulting in a widening WCS-WTI differential. The WCS price is expected to improve to US$48.00/bbl in 2026, reflecting a higher WTI benchmark price and narrowing price differential as tariffs are assumed to be phased out. It is anticipated to reach US$57.00/bbl by 2034, 10% lower than the base case and in line with the rise in the WTI price tariff case forecast.

Low- and High-Price Cases

The low- and high-price cases reflect near- and long-term volatility in the WCS price. Both cases were estimated using the 95% confidence interval. Similar factors captured in the WTI forecast are expected to influence the WCS low- and high-price cases. The following additional factors affect the WCS price:

Low-price case:

• Oil sands production rises more than expected and exceeds storage.
• Reduced throughput from complex refineries, decreasing their demand for heavy crude oil.
• Increased supply of competing heavy crude oil globally.
• Pipeline outages reduce takeaway capacity.

High-price case:

• Oil sands production rises less than expected and leaves ample unused storage.
• Increased throughput from complex refineries, increasing their demand for heavy crude oil.
• Reduced supply of competing heavy crude oil globally.
• Additional pipeline expansions increase takeaway capacity.