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Canadian crude-by-rail exports bounce back in March as pipeline capacity limited

Crude oil, and other petroleum products, are transported in rail tanker cars on a Canadian Pacific Railway (CPR) train near Olds, Alberta, Canada on Tues., Oct. 23, 2018. THE CANADIAN PRESS IMAGES/Larry MacDougal

The Canada Energy Regulator says Canadian crude-by-rail exports bounced back in March due to better oil production amid limited export pipeline capacity for heavy oil.

It says exports rose 57 per cent to reach 175,580 barrels per day after 111,900 barrels per day were exported by rail in February.

Exports in both months are down from 195,500 bpd in January and 350,570 in March 2020.

Crude-by-rail numbers have been volatile in the past few years. Shipments reached a record 412,000 bpd in February 2020, then fell to an eight-year low of 39,000 bpd last July.

Rail transportation of crude oil is considered to be more expensive than shipping by pipeline so shippers tend to use it only when pipelines are full or if the destination market offers much higher prices than can be achieved in Canada.

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READ MORE: U.S. analysts brace for more oil by rail as debate continues over cross-border pipelines 

The CER says total oil exports from Canada in March were 3.66 million barrels per day, down from 3.72 million bpd in February and 3.98 million bpd in March 2020.

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