Canadian crude and refined product exports poised for growth
Since crude occupies the largest share in Canada’s energy exports, let us start with that commodity before taking a look at refined products and LPG. With the ongoing supply disruptions in the Middle East, Canada and especially Western Canada has emerged as a key marginal supplier of crude and LPG to the Northeast Asian markets. ...
Canadian crude and refined product exports are expected to experience growth in the near future. Crude oil, being the largest share of Canada's energy exports, has been particularly impacted by supply disruptions in the Middle East. As a result, Western Canada, especially, has become a significant marginal supplier of crude and liquefied petroleum gas (LPG) to Northeast Asian markets.
In August, crude production in Western Canada experienced a decline due to maintenance work at oil sands facilities; however, several facilities, such as Cenovus Energy's Christina Lake, Suncor's Firebag, and MacKay River, are set to come online or resume operations soon. Although some upgrades are ongoing and will continue into mid-October, Western Canadian crude production is projected to increase in Q4 2026 and Q1 2027.
This growth follows a seasonal trend, as producers typically carry out maintenance during harsh winter conditions to prepare for full capacity once the winter ends.
The main constraint for Canadian producers is egress capacity, which refers to the pipeline infrastructure required to transport crude to export markets. To address this bottleneck, optimization projects are ongoing and planned. Several oil sands developments are anticipated to boost output growth in Western Canada, such as Cenovus Energy's anticipated output exceeding 1 million barrels of oil equivalent (boe) per day, and International Petroleum's Blackrod Phase 1 coming online and ramping towards full capacity by late 2027.
Other expansions, like Athabasca Oil's Leismer project, will also contribute to increased production.
When examining Canadian crude exports, it is crucial to differentiate seaborne exports into three regions - Canada West Coast, Canada East Coast, and re-exports from the US Gulf Coast. Vancouver's seaborne exports are essentially capped around 500-550 thousand barrels per day (kbd) due to port and terminal constraints. Additionally, there is an upcoming pipeline optimization project on the Trans Mountain Expansion pipeline, which aims to increase capacity by 90 kbd by late 2026 or early 2027.
Seaborne crude exports have been declining since their peak in June, mainly due to US refiners processing more Canadian heavy crudes to capitalize on strong refinery margins, keeping barrels onshore rather than directing them to export markets.
Canadian seaborne refined product exports in 2026 are primarily market-driven rather than the result of a significant structural increase in refining capacity. However, diesel and gasoil exports, driven by strong refinery margins, will contribute to the increase. The Irving Oil Saint John refinery, which is undergoing planned maintenance until mid-November, and other refineries with maintenance scheduled for Q3/Q4 2026, such as Imperial Oil's Sarnia, Suncor's Montreal, and Suncor's Edmonton refineries, could lead to lower product exports to US PADD 1 and potential imports from Northwest Europe.
Written by urgent.news from Hellenic Shipping News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.