As trade tensions between the U.S. and Canada continue to escalate, Canadian leadership has been hesitant to involve its biggest export to the U.S. in trade negotiations: oil.
Canada sends millions of barrels are sent to U.S. refineries each day to make gas, jet fuel, and diesel. If energy were to become seriously entangled in the trade feud, it could mean mutually assured destruction.
The U.S. depends heavily on Canadian crude oil, much of it coming from Alberta’s oil sands.
“The U.S. imports 4 million barrels a day of Canadian crude oil, and it comprises a very significant proportion of the heavy crude oil diet that the midcontinent refineries have gotten very used to,” said Susan Bell, senior vice president of downstream solutions research at Rystad Energy.
A lot of U.S. refineries were actually specifically tailored to process the heavy crude that Canada produces.
As for Canadian oil producers, “you got to have a market to sell stuff in,” said Charles Mason, economics professor at the University of Wyoming. “If they can secure contracts to deliver stuff to U.S. refineries, that's a very useful market for them.” |