Despite Trade Turmoil, Canadian Oil Exports Increased in May

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Written by Daniel Graeber for IIR News Intelligence (Sugar Land, Texas)

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Summary

Nearly all Canadian crude oil exports go to the U.S. Renewed tensions over tariffs, however, prompted Canadian leaders to pursue a strategy of trade diversification.

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Acrimony Won't Upend Energy Trade--Yet

Amid heightened tensions over tariffs and energy, federal Canadian data show total crude oil exports increased 7% in May, when compared with the same month last year.

Wildfire season in Canada has spared the nation's energy sector so far, according to Industrial Info Resources data. Canada's multibillion-dollar energy and timber industries were under threat from wildfires in the Canadian Rockies and in north Ontario and into Quebec last year, and smoke from Ontario this year prompted outrage from U.S. officials tacitly worried about health.

But even as relations sour, Canada remains the top crude oil exporter to the U.S. economy, with its 4 million barrels per day (bpd) in deliveries accounting for about 60% of the foreign oil shipments.

Based on federal Canadian data, nearly all the crude oil exports went to the U.S Data to May show total exports averaged 4.5 million bpd, a 7% increase from the same period last year. Barring small variances during the COVID-19 pandemic, federal data show steady gains in exports over the last 10 years.

Canada, however, is working to diversify its trade arteries away from the U.S., a trend that began with the start of President Donald Trump's second, non-consecutive term in office in January 2025. Prime Minister Mark Carney, a former central bank governor, has vowed to cut U.S. trade in half in response to Trump's ongoing tariff threats.

"Becoming an energy superpower--delivering those benefits for Canadians--means more than a connected grid. It means getting big things built, in every part of the country," Carney said last week. "The agreements between the federal government and the government of British Columbia, and the agreement with the government of Alberta, clear the path for major projects in both provinces."

By the Numbers

• 50% tariffs mulled by Trump
• 7% annual increase in oil exports to May

New Pipelines Provide New Opportunity

Provincial arrangements have focused on expanded crude oil exports from Alberta through British Columbia. A proposed new pipeline would largely follow the path of the existing Trans Mountain network, the only network that can deliver Canadian crude oil outside of North America.

Trans Mountain was twinned in 2024 to carry about 850,000 bpd. The new artery would be a joint effort from the operators of Trans Mountain and Pembina Pipeline Corporation. Industrial Info Resources is tracking multiple sections of the Trans Mountain system; readers can learn more from a list of pipeline reports.

Elsewhere, the premiers of Alberta and Ontario announced a proposal for a new crude oil pipeline from Alberta to Sarnia on the U.S.-Canadian border in the Great Lakes. Dubbed the Northern Shield energy corridor, a 1,860-mile pipeline could deliver up to 500,000 bpd, with a potential for expansion to 800,000 bpd.

Northern Shield would largely follow the path of the now-abandoned Energy East project.

TC Energy, formerly TransCanada, pulled the plug on Energy East in 2017 after facing regulatory scrutiny. Energy East would have moved up to 1.1 million bpd, ending at a proposed marine terminal in Saint John, New Brunswick.

Some premiers had mulled the prospect of imposing tariffs on electricity and crude oil sent to the U.S. Apart from crude oil, some U.S. states are highly dependent on Canada for electric power.

Trump already imposed a 25% tariff on Canadian aluminum and steel, on top of a 10% tariff on softwood timber and lumber. The president last week threatened a 50% tariff on Canada starting next month, saying Canada was pursuing discriminatory trade policies of its own.

Ontario Premier Doug Ford, a vocal critic of the U.S. president, told CBS News recently that his province wasn't backing down, and neither should the Canadian government.

"When someone comes up and punches you in the face, not once, not twice, 10 times, you have to stand up to that person," Ford said. "Someone in the schoolyard wants to take your lunch money, you're going to fight back. And I've encouraged the prime minister to fight back."

Key Takeaways

• Trade disputes do little to curb Canadian oil exports to U.S. refiners
• Fight back, Ontario Premier Doug Ford says in response to U.S. tariffs

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About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news, and analysis on the industrial process, manufacturing, and energy-related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified, and verified plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 trillion (USD).