Saudi and Canadian production cuts are making the world pay more for oil

More than half of the world's heavy crude is processed in the US

Output cuts in oil-rich Alberta and Saudi Arabia are combining to leave heavy-crude refiners from the Gulf of Mexico to Asia in a bind.

While curtailments in the Canadian province have propelled local prices to their strongest level in almost a decade, other grades like Arab Heavy and Heavy Louisiana Sweet are also surging. The Saudis are expected to largely focus on paring output of heavy crude as they lead efforts to rebalance the global market.

“Historically, when the Saudis have cut output, it’s heavy and medium crude,” said John Auers, executive vice president at energy consultant Turner Mason & Co. in