China Becomes Top Buyer of Canadian Oil via Trans Mountain Pipeline
China has emerged as the largest customer for Canadian oil shipped through the expanded Trans Mountain Pipeline, marking a significant shift in global crude flows. The change comes amid escalating U.S. trade tensions and sanctions on other major oil exporters.
Why China Is Turning to Canadian Oil
Since the Trans Mountain Pipeline (TMX) expansion began full operations in June 2024, Canada has exported an average of 207,000 barrels per day (bpd) to China, a staggering jump from 7,000 bpd in the decade prior.
This shift is driven by several factors:
- U.S. trade war pressures, straining Canada-U.S. relations.
- Sanctions on Russian and Venezuelan crude.
- China’s strategy to diversify energy sources and reduce dependence on risky suppliers.
“Chinese refineries are mindful of U.S. sanctions and want stable alternatives,” explained Philippe Rheault of the University of Alberta’s China Institute.
Trans Mountain Pipeline Expansion: A Game Changer
The $34-billion TMX expansion tripled the pipeline’s capacity to 890,000 bpd, providing Canadian oil producers access to Pacific markets.
While many expected U.S. West Coast refineries to dominate TMX demand, China’s growing appetite for Canadian crude has surpassed initial projections.
In the same period:
- The U.S. imported 173,000 bpd from TMX.
- Exports to other Asian markets—South Korea, Japan, India, Brunei, and Taiwan—also rose.
Canada’s Push to Diversify Oil Exports
Canada has long been over-reliant on the U.S. for oil exports, with roughly 90% of its crude flowing south. However, recent trade tensions and threats of tariffs have intensified efforts to diversify.
Canadian crude exports to non-U.S. destinations surged nearly 60% in 2024, hitting a record 183,000 bpd, according to Statistics Canada.
Despite this success, challenges remain. Regulatory and political hurdles continue to stall new pipeline projects aimed at reducing U.S. dependency.
TMX Capacity and Future Growth
In 2024, TMX operated at 77% capacity, slightly below its 83% forecast, partly due to high shipping tolls. However, projections suggest:
- 84% capacity utilization in 2025.
- 92% by 2027.
Trans Mountain Corp. is now exploring further expansions to add 200,000 to 300,000 bpd of capacity.
According to energy strategist Skip York, any new capacity will likely head to Asia.
“Virtually all incremental vessels will flow west to China,” he said.
What’s Next for Canada’s Oil Industry?
As China’s demand grows and global dynamics shift, Canada’s opportunity to establish itself as a key crude supplier to Asia becomes more viable. However, the success of this pivot depends on addressing pipeline capacity, competitive tolls, and navigating geopolitical uncertainties.
Do you think Canada should invest in more export pipelines to Asia, or focus on existing infrastructure?
More…
- https://www.msn.com/en-ca/money/topstories/with-us-trade-war-china-now-top-buyer-for-canadian-crude-on-trans-mountain-pipeline/ar-AA1EUCdx
- https://www.reuters.com/business/energy/with-us-trade-war-china-now-top-buyer-canadian-crude-trans-mountain-pipeline-2025-05-16
- https://www.cbc.ca/news/business/china-canada-oil-trans-mountain-pipeline-1.7537530
- https://www.overheretoronto.com/ontario-budget-2025-232-5b-war-chest-to-tackle-u-s-tariffs-and-boost-economy
