Mexico, Columbia and Iraq win big as Canadian oil exports to the US continue to fall
It's no secret that over 95% of Canada's oil exports are destined for our neighbours to the south. US imports of Canadian oil have been climbing steadily over the past decade and reached a record high of 3.5 million bbl/day earlier this year.
But that number has been falling steadily over the past few months. And the reason might surprise you.
While upgrader outages in April and the Fort McMurray wildfires in May might be be a factor, a bigger contributor is the recent reversal of Enbridge's Line 9, which runs from Sarnia, Ontario to Montreal, Quebec.
Originally built in 1976, Line 9 connected into a pipeline network that transported Alberta oil to refineries in Quebec and Ontario. But the line was reversed in 1998 bringing cheap foreign oil into Alberta refineries. Enbridge finally got the green light last December to reverse the direction once again, bringing 300,000 bbl/day of Alberta oil to Ontario and parts of Quebec.
Refineries in Ontario now get 100% of their feedstock from Alberta. Quebec refineries are also slowly reducing reliance on foreign imports. And that's translating into less oil exported to the US.
So who's benefitting the most from the decline in Canadian oil exports? So far, it looks like Mexico, Columbia and Iraq.
After falling steadily through the last decade, foreign oil imports into the US have started climbing again since last October. Blame the recent slide US shale production and depleting reserves in Alaska.
Given the recent slide in oil prices and production stall in Alberta, it remains to be seen if this is just a bump in the road or the start of a new trend south of the border.
Both final and preliminary US oil import numbers from the Energy Information Administration (EIA) are posted on the Energy Statistics page. Preliminary numbers are updated every Wednesday afternoon. Final estimates from the EIA are updated monthly, two months in arrears.