As shifting crude flows, tightening sanctions, and evolving heavy sour fundamentals reshape Asia-bound trade, understanding how China’s procurement strategy is changing has become essential to interpreting the Americas market. With Venezuelan supply returning to the global system under new US waivers, and Canadian grades competing more directly in Asia, 2026 is likely to bring a new phase of adjustment across the hemisphere.

At the Argus Americas Crude Summit, Tom Reed will analyse these dynamics with a focus on China’s role in shaping demand for Latin American and Canadian supply, including how sanctions, price competitiveness, and strategic stockpiling are influencing lows. His sessions will also consider how Venezuela’s re-emergence may shift heavy sour crude availability and what effect this could have on refiners in China and India, approached in line with Argus’ commitment to clear, market-focused insight.

He will join colleagues, including Gus Vasquez, who will provide a dedicated look at Venezuela’s evolving export landscape and its implications for regional crude markets.

This exclusive Q&A outlines the market forces shaping 2026, including China’s crude buying trends, competition among heavy sour grades, and emerging policy driven shifts in global trade flows.

What are the current expectations for crude oil prices given what supply may look like in 2026 and further ahead?

While prices remain difficult to predict with any degree of confidence given the currently fluid geopolitical environment, the general view is that there will be fundamental pressure to the downside for crude oil prices in 2026, and maybe further out, because of ample availability of supply around the globe.

Production from the US, which stands atop the global producers list, is expected to average almost 13.6mn b/d in 2026. This is a figure that the US EIA arrived at most recently after revising its forecasts higher for the last three months in a row. The EIA lifted its global production forecast to 107.37mn b/d for 2026, representing an increase of 200,000 b/d from its previous forecast.

For now, Opec+ will hold production at current levels to prevent additional volumes coming into a market that is looking oversupplied already, despite sanctions on Russia.

And in Latin America, Brazil, Guyana and Argentina all have expansion plans that will allow them to export greater volumes of crude to a larger number of customers across more regions, and those plans show no signs of slowing. Whether a lower price environment eventually does impact any of those plans remains to be seen.

How will changes along the US west coast impact global flows for crude and products in 2026?

Regional refining capacity will be reduced by a total of 17pc once Phillips 66’s 139,000 b/d Los Angeles and Valero’s 145,000 b/d Benicia refineries shut down operations permanently early this year. And a further 85,000 b/d of capacity is in question still as Valero contemplates the future of its Wilmington refinery. This will inevitably have an impact on traditional crude suppliers to the region both in Latin America as well as the Middle East.

On the products side, we’re already seeing refineries in the Pacific northwest gearing up to supply gasoline to California in the short term. In the longer term, US refiners are looking at a fresh batch of midstream solutions that could move fuel from the other regions to western states, including Arizona and Nevada, which depend heavily on California for fuel.

What is the expectation for the light-heavy crude spread in the US and how might refinery diets change as a result this year?

US refiners are expecting wider differentials between light and heavy crude in the early part of 2026 as a result of increased US Gulf coast, Canadian and Opec+ supplies.

This document has been prepared by the Argus Media group (referred to herein as “Argus”) for informational purposes only and has not been prepared for any particular purpose. The information or opinions contained in this document are provided on an “as is” basis and should not be construed as legal, tax, accounting or investment advice or the rendering of legal, consulting, or other professional services of any kind. To the maximum extent permitted by law, neither Argus nor its directors, shareholders, personnel or advisers makes any representations or warranties as to the accuracy or completeness of this document.

Source, Argus Media group