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Written by Daniel Graeber for Industrial Info Resources (Sugar Land,
Texas)--Canadian energy companies have been spared from the pressure of U.S. tariffs so far, but Prime Minister Mark Carney said the impacts "remain present" in the Canadian economy.
New blanket tariffs from U.S. President Donald Trump are in effect, with Canada facing a 35% tariff on goods sent to the U.S. economy. Canada's economy is already impacted by tariffs on aluminum and steel, creating supply-chain pressures for everything from the automotive sector to pipelines.
With nearly 90% of its soft lumber exports headed to the United States, Carney earlier this week offered a cash infusion to support the industry, but said Wednesday that resolve was needed.
"First Ministers agreed to accelerate efforts to mobilize capital and investment, diversify supply chains, and strengthen domestic production capacity," a readout from Carney's office read. "They were also unanimous in encouraging Canadian businesses to prioritize and leverage Canadian expertise, where possible, to help alleviate the short-term economic impacts of U.S. tariffs, reduce dependence on vulnerable trade flows, and build Canada's long-term economic resilience."
A new free-trade deal with the European Union could help expand Canadian trade arteries, particularly with its low-carbon steel. Holding some of the largest deposits of crude oil in the world, meanwhile, Canadian energy companies have been resilient against tariffs so far.
Last week, Canadian energy company Enbridge Incorporated (Calgary, Alberta), which has an expansive pipeline network covering much of North America, said it was largely insulated from tariffs. On Thursday, Canadian Natural Resources Limited (Calgary, Alberta) said its second-quarter net earnings were on par with first-quarter levels, but up some 40% year-on-year to USD$1.78 billion.
"Our business model is robust and sustainable, resulting in a top tier WTI [West Texas Intermediate] breakeven in the low to mid-USD$40 per barrel range at which prices we generate the adjusted funds flow required to cover both maintenance capital levels and dividends," said Scott Stauth, the company's president.
WTI, the U.S. benchmark for the price of oil, was trading at around $67 per barrel in early trading Thursday. The U.S. federal government expects the price to fall into the $50 range by next year, below the point at which many domestic shale drillers can make a profit.
Total production for Canadian Natural Resources averaged 1.4 million barrels of oil equivalent per day (Boe/d), an increase of 135,000 Boe/d year-on-year. That came despite planned maintenance at its Athabasca Oil Sands project in Alberta, which the company said it completed five days ahead of schedule and on budget.
By July, the company said the Athabasca project was running at around 106% of its peak utilization rate, churning out around 600,000 barrels of oil per day.
Canadian barrels are largely locked to North America, though the Trans Mountain crude oil pipeline offers some export options from British Columbia. Because U.S. refineries are tailored to process heavier crude oil slates, the world's largest economy relies on Canada for about 60% of its total crude oil imports.
Trump spared energy from tariffs, which are taxes paid by the importer. The United States is also a net importer of natural gas from Canada.
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 validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
New blanket tariffs from U.S. President Donald Trump are in effect, with Canada facing a 35% tariff on goods sent to the U.S. economy. Canada's economy is already impacted by tariffs on aluminum and steel, creating supply-chain pressures for everything from the automotive sector to pipelines.
With nearly 90% of its soft lumber exports headed to the United States, Carney earlier this week offered a cash infusion to support the industry, but said Wednesday that resolve was needed.
"First Ministers agreed to accelerate efforts to mobilize capital and investment, diversify supply chains, and strengthen domestic production capacity," a readout from Carney's office read. "They were also unanimous in encouraging Canadian businesses to prioritize and leverage Canadian expertise, where possible, to help alleviate the short-term economic impacts of U.S. tariffs, reduce dependence on vulnerable trade flows, and build Canada's long-term economic resilience."
A new free-trade deal with the European Union could help expand Canadian trade arteries, particularly with its low-carbon steel. Holding some of the largest deposits of crude oil in the world, meanwhile, Canadian energy companies have been resilient against tariffs so far.
Last week, Canadian energy company Enbridge Incorporated (Calgary, Alberta), which has an expansive pipeline network covering much of North America, said it was largely insulated from tariffs. On Thursday, Canadian Natural Resources Limited (Calgary, Alberta) said its second-quarter net earnings were on par with first-quarter levels, but up some 40% year-on-year to USD$1.78 billion.
"Our business model is robust and sustainable, resulting in a top tier WTI [West Texas Intermediate] breakeven in the low to mid-USD$40 per barrel range at which prices we generate the adjusted funds flow required to cover both maintenance capital levels and dividends," said Scott Stauth, the company's president.
WTI, the U.S. benchmark for the price of oil, was trading at around $67 per barrel in early trading Thursday. The U.S. federal government expects the price to fall into the $50 range by next year, below the point at which many domestic shale drillers can make a profit.
Total production for Canadian Natural Resources averaged 1.4 million barrels of oil equivalent per day (Boe/d), an increase of 135,000 Boe/d year-on-year. That came despite planned maintenance at its Athabasca Oil Sands project in Alberta, which the company said it completed five days ahead of schedule and on budget.
By July, the company said the Athabasca project was running at around 106% of its peak utilization rate, churning out around 600,000 barrels of oil per day.
Canadian barrels are largely locked to North America, though the Trans Mountain crude oil pipeline offers some export options from British Columbia. Because U.S. refineries are tailored to process heavier crude oil slates, the world's largest economy relies on Canada for about 60% of its total crude oil imports.
Trump spared energy from tariffs, which are taxes paid by the importer. The United States is also a net importer of natural gas from Canada.
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 validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
