• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 7 days The United States produced more crude oil than any nation, at any time.
  • 8 hours Could Someone Give Me Insights on the Future of Renewable Energy?
  • 7 days How Far Have We Really Gotten With Alternative Energy
  • 10 days James Corbett Interviews Irina Slav of OILPRICE.COM - "Burn, Hollywood, Burn!" - The Corbett Report
  • 11 days The European Union is exceptional in its political divide. Examples are apparent in Hungary, Slovakia, Sweden, Netherlands, Belarus, Ireland, etc.
Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

More Info

Premium Content

The Price Of Heavy Crude Oil Is Climbing

  • Heavy crude oil traditionally trades at a significant discount to lighter and sweeter grades, but the price of heavy crude is climbing.
  • The main factor driving the uptick in heavy crude prices is a new mega-refinery in China which has contracted at least 8 million barrels of heavy crude.
  • As well as China’s mega-refinery, constrained supply from Venezuela and Ecuador and the end of refinery maintenance season in the U.S. are pushing prices higher.
Heavy oil

A new Chinese refinery is pushing the price of heavy crude oil higher after a prolonged period of depression.

Heavy crude has traditionally traded at an often significant discount to lighter and sweeter grades but now producers of the heavy varieties of oil are set to see some higher prices as PetroChina starts up a new refinery, Bloomberg reports.

Originally designed to work with Venezuelan crude, the new refinery will now be using heavy crude from Colombia, Ecuador, and Canada for its operations, the report noted, citing unnamed sources.

According to them, PetroChina has contracted at least 8 million barrels of heavy crude from these three countries, to load in April. And prices are already reflecting this tick-up in demand: Canada’s Cold Lake sells at a discount of $11.50 to Brent crude, which is down from about $20 per barrel earlier this year.

More bullish factors have lined up for heavy crude prices, too, including the end of maintenance season in the United States, which would mean a rise in demand heavy crude grades. Another bullish factor is limited supply from Venezuela and Ecuador, according to Bloomberg’s sources.

Venezuela’s oil exports have shrunk considerably as the government investigated unpaid oil delivery bills and Ecuador recently had to reduce production amid anti-industry protests in several communities from oil-producing parts of the country.

The protests prompted state-owned Petroecuador to declare force majeure on production from these regions, reducing the available amount of heavy crude.

The new refinery, located in the southern Chinese province of Guangdong, is currently ramping up, after trial runs last year. At capacity, the refinery will be able to process 400,000 barrels of crude daily. It can run on heavy crude only.

Exxon is among the investors in the mega-refinery project as part of its strategy to expand its global chemicals manufacturing capacity.

By Irina Slav for Oilprice.com


More Top Reads From Oilprice.com:

Download The Free Oilprice App Today

Back to homepage

Leave a comment
  • De on March 30 2023 said:
    hmm and the economy takes another plunge.while Russia pays less than a dollar a gallon on all fuels

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News