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CommoditiesHigh Impact•3 March 2026•

1 min read

Canadian Heavy Crude Rallies as Hormuz Crisis Tightens Global Supply

Infographic of oil tankers and the Strait of Hormuz map with text showing a 9% oil price increase to 104.

Key Facts

1The Western Canadian Select (WCS) discount narrowed to $11.80 per barrel against WTI, the narrowest differential since November.

2Iraq has begun shutting in approximately 1.6 million bpd of output due to the Strait of Hormuz crisis.

Canadian heavy crude prices strengthened significantly as the discount for Western Canadian Select (WCS) against WTI narrowed to just $11.80 per barrel. This represents the narrowest price differential since November, signaling robust physical demand for Canadian oil. The rally is primarily driven by the ongoing crisis in the Strait of Hormuz, which has forced Iraq to shut in approximately 1.6 million barrels per day of production. Heightened geopolitical risks in the Middle East are reshuffling global oil flows, forcing refiners to seek heavy sour alternatives. The massive supply vacuum created by the Iraqi disruption has positioned WCS as a primary alternative for global markets. Market experts anticipate that the strengthening of WCS prices will provide a significant tailwind for the Canadian economy and the CAD/USD exchange rate.