Oilpatch wary as Ottawa, provinces threaten energy exports in retaliation over Trump tariffs
The news that United States president-elect Donald Trump could slap a 25 per cent tariff on Canadian goods upon taking office in January sent a jolt of alarm through the entire Canadian economy, but the alarm in the oilpatch has only deepened as Ottawa and the provincial governments threaten to target energy exports in retaliation.
Energy producers and fuel companies on both sides of the border are growing concerned that commodity flows could be disrupted if a tit-for-tat trade war erupts in response to Trump’s announcement on social media in November that he intends to impose a tax on all goods entering the country from Canada and Mexico.
One of the country’s largest integrated oil producers, Cenovus Energy Inc., which owns refineries and interests in facilities in Canada and the U.S. Midwest and Texas, warned against tariffs or retaliations over oil.
“Any trade barriers that might be imposed on this free flow of trade could have a serious negative impact on both sides of the border,” Cenovus spokesperson Reg Curren said.
“A reduction in Canadian exports will inevitably lead to reduced revenues for industry and governments, and it will also increase the price American families and consumers pay for finished products, such as gasoline, diesel, aviation fuel and asphalt — of which Cenovus is a leading producer.”
Canada is reliant on U.S. demand for its energy exports, but U.S. refineries have also grown increasingly dependent on Canadian crude, the exports of which to the U.S. have doubled since 2010 to nearly four million barrels per day (MMb/d) from 1.9 MMb/d, according to data from the Canada Energy Regulator and the U.S. Energy Information Administration.
The American Petroleum Institute, one of the most powerful
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