Canadian Oil Pushes Deeper Into U.S. Gulf Coast Market

For years, the United States has been Canada's primary energy partner, absorbing the majority of its oil and gas production. Canada exports 80% of its crude output, with approximately 90% sent to the U.S. due to a century-old integrated oil infrastructure. In 2024, Canada exported $160 billion worth of crude oil, NGLs, and natural gas, with over 60% of that Canadian oil flowing into U.S. markets.

In 2025, Canada's crude exports reached a record 4.3 million barrels per day (bpd), 90% of which went to the U.S., according to the Canada Energy Regulator. This trade relationship has grown stronger this year, with U.S. imports of Canadian crude averaging just over 4 million bpd in the first half of 2026, while total Canadian crude exports were 6.4% higher than the previous year.

Canadian heavy crude has become increasingly difficult for U.S. Gulf Coast refiners to replace as Mexican production declines, Venezuelan supply remains uncertain, and the Iran war hampers shipments of competing Middle Eastern grades. Enbridge's Houston Oil Terminal (EHOT), launched in July, provides Canada with enhanced access to the U.S. Gulf Coast market, offering Canadian heavy crude an additional outlet for oil sands production as refiners seek alternatives to Middle Eastern grades.

The U.S. Gulf Coast houses the world's largest concentration of heavy, sour crude processing capacity, making it an ideal destination for Canadian barrels. Although the Midwest remains the largest U.S. market for Canadian crude, the Gulf Coast is a smaller market for Canadian barrels, despite being the country's largest refining center and home to numerous complex refineries capable of processing heavy, sour crude.