(Bloomberg) -- Canadian and Alaskan crude that normally travels to the U.S. West Coast is finding a market in China, where demand is almost back to pre-pandemic levels.
The Sofia became the second oil tanker in less than a month to ship Alaskan oil to Qingdao, China, when it left Valdez over the weekend, data compiled by Bloomberg show. At about the same time, the Maria Princess left Vancouver also bound for Qingdao, becoming at least the third oil tanker to sail from British Columbia for China this year. Draft readings indicate the ships were full when they departed.
The vast majority of Alaskan as well as Canadian oil, shipped down the Trans Mountain pipeline from Alberta to British Columbia, typically winds up supplying refineries in either Washington state or California.
Recently, those flows have been disrupted amid depressed U.S. West Coast oil consumption caused by state-ordered lockdowns. By contrast, China, the country that suffered first from the virus, is further along in opening back up. Demand in the Asian nation dropped by close to 20% in February but fuel consumption has since rebounded as factories reopen and commuters drive rather than use public transport. Oil demand is now all but recovered there, according to people familiar.
Alaska North Slope oil prices have surged to near parity with West Texas Intermediate futures after collapsing to a discount of $9.50 last month, the widest in data going back to the early 1990s, data compiled by Bloomberg show. The price collapse coincided with reduced demand by U.S. West Coast refiners and prompted Alyeska to cut flows on the Alaska pipeline.
Last month, the U.S.-flagged Alaskan Navigator sailed from Valdez, signaling China as its destination. Maria Princess follows the tankers Mitera Marigo and Mare Oriens in sailing from Vancouver to China.
(Adds Alaska North Slope oil prices in penultimate paragraph.)
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