The ongoing Middle East crisis has led to an unprecedented increase in tanker freight charges and a reduction in available shipping capacity, according to a report by OilPrice.com. This logistical challenge is now impacting the global heavy crude market.
Specifically, the situation is contributing to an oversupply of heavy crude grades across North and South America. Concurrently, refineries in Asia and Europe are experiencing a deficit of these same heavy crude types.
Canada's crude oil output exceeds 5 million barrels per day, with heavy crude constituting the majority of this volume. Approximately 4 million barrels per day of this Canadian production is transported to refineries within the United States.
Furthermore, Venezuelan oil production has seen an increase following recent shifts in U.S. policy regarding the country, adding to the regional supply dynamics.