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Gulf Coast Heavy Crude Spreads Diverge Amid Supply Constraints, TPH Says

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US Gulf Coast heavy crude markets are showing signs of divergence as widening discounts for Mexico's Maya blend clash with tightening supplies of Western Canadian Select, TPH Energy strategists said in a note on Monday.

Matthew Blair, TPH Energy analyst, said that the market for Maya crude has weakened, with state-owned Pemex widening its discretionary "K factor" price adjustment to a $ 9.20-per-barrel discount for July, steeper than the $8.15 set in June and $4.35 in May.

TPH analysts forecast that the move will push Maya-Brent differentials toward a $9.71/bbl discount at the start of Q3, a notable shift from the $7.58 average seen in Q2.

The broader heavy crude landscape has been volatile in 2026. TPH said differentials widened in Q1 as additional barrels from Venezuela entered the market, but narrowed in Q2 as regional supplies tightened due to reduced Middle Eastern sour crude shipments.

Simultaneously, WCS at Houston has seen its discount to Brent narrow significantly to $7.52 in June, down from $15.12 recorded in May.

Market participants attribute this tightness in Canadian heavy crude to supply-side constraints at the source. TPH said unfavorable wet weather in Canada has hindered oil sands operations, compounded by an unplanned outage at Cenovus Energy's (CVE) Foster Creek and Christina Lake assets.

The bank said the shifting dynamics in heavy crude pricing carry significant implications for Gulf Coast refiners, specifically Valero Energy (VLO), PBF Energy (PBF), Phillips 66 (PSX), and Marathon Petroleum (MPC).

Price: $25.68, Change: $+0.52, Percent Change: +2.05%

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