Although Canada is the world’s 4th largest producer of crude oil, it also covers local oil demand from the United States

8/11/2021

The refineries along the Gulf Coast of the United States play a key role in meeting Canada’s demand for petroleum.

Calgary – Although Canada’s oil demand is more than two and a half times higher, most of the country’s crude oil demand comes from the United States, according to new data, analysis and solutions, according to a new analysis by IHS Markit. .

A recent report on the IHS Markit Oil Sands discussion In 2019, approximately 55% of crude oil and sewage demand in Canada was imported from the United States (600,000 B / d) or through the United Nations. States and then to the country (480,000 b / d), also known as repatriation.

“Geographic needs and market demand for different types of crude oil are the basis of a complex and interdependent oil logistics system between Canada and the United States,” said Silina Huang, director of North American Crude Oil Markets. Although this study highlights Canada’s reliance on U.S. supplies and transportation, the relationship is truly balanced, with each other relying on each other to meet domestic needs on a daily basis.

The main reason for the system’s operation is that 95% of Canadian production is located off the coast of the country, inland, and often in the central regions of Ontario and Quebec. The type of fuel required in different regions also plays a role. Westerners who have invested in heavy-duty processing facilities in the Midwestern United States and the Gulf of Aden have been growing Canada’s heavy oil production, while refineries in Ontario and Quebec have focused on lighter refineries.

“Although it is not well known, the complexity of the US Gulf strain is far from Western Canadian production in Ontario and Quebec, and it is very large and is already designed to eat large amounts of heavy raw raw materials,” Huang said. That provides an attractive solution for both parties.

IHC Markti estimates that Canada’s overall long-distance transport system, which includes pipelines, railways and sea transport, will produce 6.6 MB of crude oil in 2019, approximately 2 MB / d.

Demand for that transport system will increase in the coming years, the report said. Despite the recent release of IHS Markit’s 10-year production forecast, despite short-term and medium-term impacts from COVID-19, Canada’s raw material is expected to grow by around 900,000 b / d between 2020 and 2030.

“Much of the expected growth in Canadian production comes from upgrading and improving existing projects,” said KH Markt, vice president and Canadian oil market analyst. “That growth is coming, and transportation is needed to maintain speed. IHS estimates that by 2025 alone, the total pre-epidemic activity will increase by more than 650,000 barrels per day.

Pipeline capacity could see a significant increase in compliance with the increased supply, followed by an increase in marine tanker traffic. However, delays in new pipeline projects could lead to more railroad activity than currently expected, the report said.

In addition, disruptions to existing pipelines – attempts to close the Enbridge Line 5 pipeline to areas such as Detroit and Michigan and Ohio, as well as areas in Toronto and Ontario and Quebec – could have implications.

Different perspectives on the speed of the transition have put pressure on the relationship between Canada and the United States, says Birr. Any disruption of existing infrastructure could have significant implications for Canada, the broader North American system, and energy security.

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