Canada Gearing up for More Crude Oil Exports

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

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Summary

The Canadian government slapped a handful of Iranian entities with sanctions over traffic issues in the Strait of Hormuz. That comes as the nation readies for more crude oil deliveries outside of North America.

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U.S-Iran MOU Expires as Canadian Readies with Sanctions

As it pursues efforts to expand its energy trade opportunities beyond North America, the Canadian government announced it was sanctioning Iranian entities for limiting traffic through the Strait of Hormuz.

Monday marked the expiration of the 14-point memorandum of understanding between Iran and the United States that laid out tacit plans for a lasting ceasefire. With attacks continuing on global shipping and energy interests, U.S. President Donald Trump again hinting at an escalation in military action.

"The number one goal is, and always will be, that Iran cannot have, in any way, shape, or form, a nuclear weapon," he said through his Truth Social media platform, though bunker-buster bombs were deployed to bury Iranian nuclear sites last year.

Crude oil prices were up slightly on the news in early morning action on Monday. Last week, and in the midst of trade talks with the United States, the Canadian government responded with pressure of its own, sanctioning a handful of individuals for tacitly blocking the Strait of Hormuz. Before the war, some 20% of the world's waterborne trade in crude oil and liquefied natural gas moved through the narrow waterway separating Iran and Oman.

"Freedom of navigation through the Strait of Hormuz is essential to global trade and energy security," Canadian Foreign Minister Anita Ananda said in a statement. "Canada calls on Iran to de-escalate and respect international navigation rights."

Canadian Oil Could Eventually Move Through Those Waters

With bilateral trade in jeopardy because of Trump's tariff policies, Canadian Prime Minister Mark Carney is working to cut North American trade and establish the nation as an energy superpower.

Right now, the Trans Mountain Pipeline, which saw its capacity double to 890,000 barrels per day (bpd) through recent expansions, is the only network that can deliver Canadian crude oil outside of North America. Industrial Info Resources data show Trans Mountain running some 720 miles from Alberta to the Pacific Coast. Industrial Info Resources offers more information on this in its Global Market Intelligence (GMI) Pipeline Database, where readers can find details in a pipeline profile.

A recent memorandum of understanding brokered between the federal government, the provincial government of Alberta and the Oil Sands Alliance, meanwhile, lays out steps to find additional export opportunities from British Columbia.

The new artery to British Columbia would be a joint effort from the operators of Trans Mountain and Pembina Pipeline Corporation, and it largely would follow the path of the existing Trans Mountain network.

Last week, the Explorers and Producers Association of Canada informed the federal government of its support for the pipeline, along with what could be imminent volume commitments.

"With one of the largest and most secure energy reserves in the world, Alberta is ready to deliver reliable, responsibly produced energy for years to come," said Brian Jean, the provincial minister of energy and minerals for Alberta.

The pipeline could carry as much as 1 million barrels per day.

The provincial government of Alberta this year earmarked US$5.2 billion for local infrastructure needs, including roads, and said it was committing $11 million over the next two years to support the planning for the crude oil pipeline to British Columbia.

By the Numbers

• US$11 million in provincial funds for new pipeline
• 1 million bpd possible in additional Canadian crude oil exports

Key Takeaways

• Canada joins in lumping pressure on Iran over maritime shipments.
• Commitments have materialized for a new pipeline to British Columbia.

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 validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).