Total U.S. crude imports rose by 620 Mb/d to 6.75 MMb/d, with increases in every region except PADD 5, where volumes decreased by 100 Mb/d. PADD 2 saw an increase of 330 Mb/d to 3.1 MMb/d, enhancing the flow of Canadian supplies into the U.S. Overall, Canada sent an additional 345 Mb/d, totaling 4.33 MMb/d, one of the highest volumes on record, which raised the January average for Canadian imports to 4.245 MMb/d, the highest on record. This increase could be attributed to rising Canadian production or efforts to move as much crude oil across the border before the imposition of a potential new tariff. President Trump has threatened a 25% tariff on all Canadian imports, including crude oil, which could affect the approximately 4 MMb/d that Canada exports to the U.S., making up over 60% of America's foreign oil supply. Although there is speculation that crude oil might be exempt from this tariff, a Canadian retaliatory restriction could impose similar constraints. Notably, the relationship is symbiotic; while the U.S. receives most of its crude imports from Canada, it also exports significant amounts of natural gasoline to Canada for use as a diluent in pipeline transport of heavy Canadian crude.
Featured Articles
Why Can't We Be Friends? - The Odds For/Against U.S. Tariffs on Imported Canadian, Mexican Crude
President-elect Trump’s plan to impose a 25% tariff on all imported goods from Canada and Mexico — including crude oil — has raised concern among U.S. refiners, many of which depend heavily on those imports and would face serious challenges in replacing them. The question is, given that dependence and the incoming administration’s pledge to reduce energy costs, will refiners — and oil producers in Canada and Mexico — succeed in their efforts to exempt crude oil from the tariff plan? In today’s RBN blog, we discuss the degree to which U.S. refineries incorporate Canada- and Mexico-sourced oil in their crude slates, the potentially devastating impacts of a tariff on Canadian crude in particular, and the odds for and against U.S. tariffs on oil imports from its neighbors.
Everybody Hurts - Trump's Tariffs Would Hurt Canadian Oil Producers More Than U.S. Refiners
Tariffs have served as a cornerstone of President Trump’s economic vision. In the campaign, he said he could impose tariffs as high as 25% on all imported goods from Canada — including crude oil — and he could deliver on that promise at any time. This has raised concerns, especially for Canadian producers and U.S. refiners, who depend on the efficient and economical movement of barrels between the trading partners. In today’s RBN blog, we look at how much Canadian crude oil flows to the U.S., how those imports could be affected by tariffs, and how Canadian producers and U.S. refiners would share the financial impact.
Heart of the Country - How Would Midwest Refiners Deal With a 10% Tariff on Canadian Crude?
The looming threat of a 10% tariff on U.S. imports of Canadian crude oil hasn’t just angered Canadians — and understandably so, we might add. It’s also put a spotlight on PADD 2 — the Midwest/Great Plains region — whose pipelines transport the vast majority of Canadian exports and whose 25 refineries (combined capacity 4.3 MMb/d) are, in many cases, significant consumers of heavy and light crudes from up north. Put simply, to assess the impacts of the still-possible trade war on U.S. refiners and producers on both sides of the border, you need to understand PADD 2’s crude oil supply/demand balance and the options Midwestern refineries that currently run Canadian crude would have if a tariff were put in place. In today’s RBN blog, we’ll discuss these dynamics.
