Key Takeaways
The U.S.’s largest source of imported oil is from Canada which continues to increase supplies to meet demand, despite the Biden-Harris administration’s rejection of the almost completed Keystone XL pipeline.
In July, the United States imported a record 4.37 million barrels per day from Canada, over 10 times as much as Alaska supplied as its output decreases and new oil prospects in ANWR and NPRA have been foreclosed by the Biden-Harris administration.
Oil continues to be shipped from Canada through a system of pipelines and by rail, the alternatives to the Keystone XL.
Canada’s Trans-Mountain pipeline is now providing additional oil supplies to Asia and the U.S. West Coast.
Canada has enormous quantities of oil sand, and its oil quality and grade fit well with U.S. refining capacity, minimizing waste and maximizing efficiency.
The United States imported 4.37 million barrels per day of Canadian oil in July–a new record surpassing the previous high of 4.35 million barrels per day set in November last year, despite the cancellation of the Presidential permit for the Keystone XL pipeline by the Biden-Harris administration and the construction of the Trans Mountain pipeline system. Oil continues to be shipped from Canada through a system of pipelines and by rail, the alternative to the Keystone XL. Refiners in the U.S. midcontinent area feared that the Trans Mountain pipeline expansion would divert supplies to the West Coast and foreign markets, but they are continuing to receive ample supply of Canadian oil as repeated delays in the pipeline’s construction gave upstream Canadian oil production time to grow by the pipeline’s in-service date on May 1. An average of 2.9 million barrels per day of Canadian oil flowed into the U.S. midcontinent region in July, marking the highest-ever rate for the same month in data going back to 1993, according to the Energy Information Administration (EIA). This is about 140,000 barrels per day higher than the prior five-year average for July. Canadian oil makes up around 70 percent of the petroleum products produced in the Midwest.
Source: https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRIMUSCA2&f=M
The Trans Mountain system, which increased the existing Trans Mountain pipeline’s capacity by 590,000 barrels per day to 890,000 barrels per day, opened Canadian oil sands to Pacific Rim markets via the Westridge Marine Terminal in Burnaby, British Columbia. The U.S. West Coast is also benefitting from the added Canadian supply, importing a record 498,000 barrels per day in July, double the typical volume for this time of year as it has displaced other foreign oil and disrupted trade flows in the Pacific. According to Trans Mountain, it moved 704,000 barrels per day in June, the latest official figure, with slightly more than half of that sent through the Westridge Marine Terminal for export.
Canadian oil flows into the U.S. Gulf coast dropped to 512,000 barrels per day in July, down by 66,000 barrels per day compared to the prior five-year average for the same month. This amount still represents a nine-month high for the region and is comparable to the 517,000 barrels per day imported in July 2023 and a signal that Canadian oil flows are largely intact since the Trans Mountain pipeline was commissioned.
Enbridge provides the largest pipeline service to the U.S. midcontinent region and beyond with its 3.1 million barrel per day Mainline system, which the company says was still oversubscribed in the second quarter. The continued demand to ship oil south and east has Enbridge considering yet another expansion that could be in place by late 2026. Enbridge believes Canadian oil production will grow by more than half a million barrels per day before 2030.
Driven in part by surging demand and also by the Trans Mountain pipeline, Canadian oil production has been booming. During the fourth quarter of 2023, major Canadian oil producers including Canadian Natural Resources Ltd., Imperial Oil Ltd., and Suncor Energy Inc. all broke production records. Oil production in Alberta reached an all-time high in 2023, according to Statistics Canada, and saw its best January ever during the first month of 2024 with output of 3.81 million barrels per day.
Global Oil Demand
Enbridge is forecasting a robust increase in global oil demand extending through 2050, which could exceed 110 million barrels per day–a significant contrast to the International Energy Agency’s forecast of a decrease to 97 million barrels per day. Enbridge attributes this expected growth to ongoing economic expansion, particularly in emerging markets, which continue to favor oil as a key energy source due to its affordability and efficiency. Enbridge’s projections align closely with the Organization of the Petroleum Exporting Countries (OPEC) estimate, which suggests a daily demand of 116 million barrels by 2045. These figures stand in stark opposition to conservative forecasts that call for steep reductions in oil consumption to mitigate climate change impacts, which is why IEA is projecting a reduction in demand from current global usage, which is around 102.9 million barrels per day.
Conclusion
Despite the Trans Mountain pipeline making Canadian oil exports to Asia available, U.S. imports of oil from Canada have reached a record in July. The United States imported 4.37 million barrels per day from Canada in July, over 10 times as much as Alaska supplied as its output decreases and new oil prospects in ANWR and NPRA have been foreclosed by the Biden-Harris administration. Canada has enormous quantities of oil sands, and its oil quality and grade fit well with U.S. refining capacity, minimizing waste and maximizing efficiency. The U.S. West Coast has doubled its Canadian oil imports and the Midcontinent region that relies on Canadian oil for its refineries is importing more than its 5-year average. Most Canadian oil continues to be shipped to U.S. regions through a system of pipelines and by rail, the alternatives to the Keystone XL. Enbridge is expecting to increase its pipeline capacity due to continued demand for Canadian oil into the United States and it believes global oil demand will increase to 110 million barrels per day by 2050—far less than IEA’s forecast that assumes mitigation efforts to climate change.
