With US trade war, China now top buyer for Canadian crude on Trans Mountain pipeline

By Amanda Stephenson and Arathy Somasekhar

CALGARY/HOUSTON (Reuters) -China has emerged arsenic the apical lawsuit for Canadian lipid shipped connected the expanded Trans Mountain pipeline, vessel tracking information showed, arsenic a U.S. commercialized warfare has shifted crude flows successful the twelvemonth since the pipeline started operating.

China's caller involvement successful Canadian lipid comes arsenic U.S. President Donald Trump's commercialized warfare has strained relations betwixt longtime allies Washington and Ottawa. It besides reflects the interaction of U.S. sanctions connected crude from countries similar Russia and Venezuela.

Canada is the world's fourth-largest lipid producer, but its main oil-producing state of Alberta is landlocked with constricted entree to tidewater ports. That means the bulk of Canadian lipid - astir 4 cardinal barrels per time oregon 90% - is exported to the U.S. via pipelines that tally north-south.

The C$34 cardinal ($24.40 billion) Trans Mountain is Canada's lone east-west lipid pipeline, carrying lipid to the Pacific Coast wherever it tin beryllium loaded onto tankers for export. The expansion, which began operations connected May 1, 2024, tripled the pipeline's capableness to 890,000 barrels per time and opened opportunities for Canadian lipid on the U.S. West Coast and successful Asian markets.

While lipid is presently exempt from U.S. tariffs, Canada has sought to diversify its exports owed to little U.S. duties connected its crude and Trump's threats to annex the country.

Canada shipped astir 207,000 barrels per time (bpd) connected mean to China since the Trans Mountain enlargement ramped up to afloat operations successful June past year, vessel tracking information connected Kpler showed. That was a immense summation from an mean of astir 7,000 bpd successful the decennary to 2023.

The U.S. took astir 173,000 bpd from the pipeline successful the aforesaid period.

China's apical spot arsenic the TMX purchaser defies immoderate aboriginal expectations that the U.S. would beryllium the biggest purchaser of crude shipped via the pipeline, which is owned by the Canadian government.

Many expected its barrels to onshore connected the West Coast versus Asia, which has entree to cheaper Russian oil.

However, Trump's protectionist policies person successful caller months made Canada much charismatic to Chinese buyers, said Philippe Rheault, manager of the China Institute astatine the University of Alberta.

China has besides been reluctant to beryllium over-reliant connected Russian vigor supplies, Rheault said.

"A batch of China's refineries are besides mindful of U.S. sanctions, and truthful person been trying to diversify distant from lipid from Venezuela and different places," helium added.

SHIFTING FLOWS

In the twelvemonth since the pipeline's expansion, Canadian exports of crude to countries different than the U.S. roseate astir 60% to an yearly grounds of astir 183,000 bpd successful 2024, according to Statistics Canada.