Canada has the third-largest oil reserves in the world, and it produces a lot of oil. Canada is rising to the top of the oil business because of innovative technologies and a constantly expanding global economy.
We covered all the points related to where does Canada get its oil from, like Canadian crude oil, imported crude oil, refined petroleum products, the oil industry and etc.
The nation of moose, maple syrup, & hockey may be the next major player on the list of nations that produce oil, stretching from Canada to the Atlantic Coast. You’ll gain a better understanding of the direction of oil in the region if you comprehend the Canadian oil business and its intricate interactions with other nations.
Rail, truck, pipeline, & ship are the four methods used to transport oil in the United States and Canada. Canada’s oil production rises annually and now exceeds the nation’s needs. The Alberta Oil Sands & Sedimentary Basin are the source of the majority of the oil.
However, Canada continues to import oil from other nations and exports most of its crude to the U.S.
Where Does Canada Get Its Oil From?
The Canadian oil business is diverse in many ways. You can learn about all of these specifics in our detailed guide below, which will also help you develop a thorough understanding of Canada’s oil production.
Canada imports oil despite possessing the third-largest oil reserves in the world. Currently, the United States, Saudi Arabia, the Russian Federation, the United Kingdom, Azerbaijan, Nigeria, and Ivory Coast import more than half of the oil used in Quebec & Atlantic Canada. We’ll tell you later in this guide where does Canada get its oil from.
1. How Much Oil Is Produced in Canada?
Unexpectedly, Canada generates a lot of crude oil. Although the Middle East is typically mentioned when discussing the production of Oil, Canada is the 4th producer & exporter of oil.
The Canadian Organization of Petroleum Products also predicts that during the coming years, the nation’s overall oil production will increase.
Among the top 10 oil-producing nations, which includes major players like China, Russia, & Saudi Arabia, is Canada. With a daily production of 5.27 million barrels, it’s no surprise that Canada is one of the major producers.
In actuality, Canada contributed 5% to global oil output in 2018. In comparison, when the nation’s output was barely 2.47 thousand tons per day, this represents a huge increase.
From coast to coast, the nation produces crude oil. The melting of Arctic ice also may reveal more oil reserves that Canada may access. Oil output in Canada is anticipated to keep rising, given this rate of expansion and ever-improving technologies.
2. Where in Canada Is Crude Oil Produced?
Canada, as was already mentioned, harvests oil from all around the country. But Alberta’s oil sands have the largest deposits of crude oil. Alberta is a part of Canada that is situated above Montana and Idaho, directly next to British Columbia.
The Western Canada Sediments Basin and offshore oil fields inside the Atlantic Ocean are additional locations for oil deposits.
The consequently proven oil reservoir in the world is found in the oil sands. They contribute significantly to the economy of Canada and makeup 97% of its proven oil reserves. What are oil sands, exactly? Sand, clay, water, & bitumen are the elements that makeup oil sands.
Crude oil is produced by extracting and refining bitumen. Similarly to this, Canada also generates crude oil from shale oil & light-tight oil, which are also found in sedimentary rock.
3. How Is the Oil Extracted?
Oil extraction can be done in a variety of ways depending on the source; there is no wrong or right way to do it. Oil can be extracted in different ways from the sedimentary basin compared to the oil sands.
Don’t overlook the refinement step that comes after the extraction. Here is a list of a few distinct extraction and refinement techniques.
1. Multi-Stage Horizontal Drilling Hydraulic Fracturing.
2. The Mining Approach.
3. Using In-Situ Analysis.
Shale oil and light-tight oil are extracted using multi-stage hydraulic fracturing and horizontal drilling. Oil from oil sands is extracted using the in-situ method as well as the mining approach. Finally, upgrading is the process used to convert bitumen obtained from oil sands into synthetic crude oil.
The mining method, as well as in approach, is the most popular due to the fact that 97% of the nation’s oil reserves are found in oil sands.
When oil sand deposits are closer to the surface, the mining technique is applied. It uses conventional mineral mining techniques. The soil is first processed in crushers after the oil sands are loaded onto trucks. Following crushing, hot water is injected as the oil sand is pumped toward the extraction facility.
More hot water is used at the plant, and the sand combination is given time to settle. Bitumen froth comes to the surface as distinct components separate when the sand settles. After that, it is taken out, diluted, and processed to create crude oil.
Similar to the ex-situ approach, hot water, in this case, steam is used to recover bitumen. For 80% of the bitumen, which is too deep down for conventional mining, this method is used. Two wells are first drilled, with one being higher than the other.
After injecting steam into the upper well, the bitumen turns liquid & flows into the bottom well as the temperature rises. The lower well’s bitumen would then be pumped up to the surface.
4. How Much Are Canada’s Oil Exports?
In an intriguing situation, Canada produces more oil than it uses. As a result, the nation can export crude oil on a net basis. The United States is also its main oil trading partner.
The United States’ main foreign oil supplier was Canada. 96% of all crude oil exports from the nation went to its neighbor, who received 3.5 million barrels of petroleum per day.
Additionally, there are two types of crude oil: heavy crude oil & light crude oil. About 78% of the export earnings to the U.S. were heavy crude oil, and the remaining 22% were light.
This is crucial since heavy crude oil makes up the vast majority of oil extracted from oil sands. Additionally, American refineries now favor processing heavy crude oil due to improved technology, which is good news again for the Canadian market.
5. What Happens to Crude Oil Imports?
As was already mentioned, the majority of Canadian oil is sent to the U.S. The U.S. has a greater capacity than Canada to handle heavy crude oil, which explains why.
While Canada only has 19, the United States has 142 refineries & is currently developing two more of it in Michigan and Illinois. The U.S.’s capacity for refining assures that oil will keep moving south.
Similarly to this, Canada produces greater oil than it can use while only refining 25% of the oil it produces. Accordingly, any future refineries would process crude for export rather than for domestic consumption by Canadians. This makes it much simpler to just export the oil.
6. What Inspires Canada to Import Oil?
Canada produces greater oil than it can use, yet the nation still has to import a significant portion of it. The oil-producing behemoth Saudi Arabia provides them, and their connection is not expected to change any time soon.
Saudi Arabian crude oil imports totalled $20.9 billion to Canada between 2008 and 2018. 10% of Canada’s total oil imports come from the Middle Eastern nation. Only after the United States is Saudi Arabia the country’s second-largest source of foreign oil as of 2017.
But why is Canada dependent on Saudi Arabian Oil when it has the third-largest oil reserve in the world? It is related to the country’s oil reserves and how they are refined.
Bitumen is created in the Alberta oil sands, where the preponderance of Canadian oil is discovered. This material yields very heavy crude oil but is incredibly difficult to refine. In fact, it requires refinement before it can flow through a pipeline since it is so heavy.
The infrastructure and resources needed to process such heavy crude oil are not available in Canada. Anyone can refine crude Oil from Saudi Arabia in the interim. Saudi Arabia’s Oil is like gold in comparison to the oil sands’ thick, tar-like hydrocarbon.
Additionally, since there is no northwestern pipeline in place, Canadian oil would need to be transported overland to reach the eastern part of the nation. The price of oil as a whole would rise as a result. Saudi Arabia, while being further away, uses tanker shipping since it is less expensive than overland shipping.
In the end, Canadian oil is thought to be of lower quality than Saudi Arabian Oil in some areas and is deemed to be further away from consumers in terms of the refining process.
Lastly, the United States is Canada’s second-largest crude oil importer and is also its closest neighbour and trading partner. In actuality, the nation’s imports of American crude oil rose. Refineries in Ontario, Québec, and the United States receive crude Oil from Saudi Arabia and the United States.
7. Oil Owners in Canada
Few significant businesses control the majority of the Canadian oil market. Although there are minor oil extraction and processing companies, the vast majority of oil is under the ownership of a small number of individuals.
Those few big businesses are held by a variety of stockholders. For instance, the bulk of oil production or marketing in Canada is managed by less than 20 of the operational businesses.
Currently, energy corporations, some of which have grown to be giants, dominate the Canadian stock market. Given that Canada’s oil reserves are expected to provide the nation’s energy demands for the next 140 years, this is not surprising.
Additionally, foreigners own interests in Canada’s major oil firms as well as Canadians. Speculators, affluent families, and a few of the stockholders are banks. Even foreign nations like Norway, Japan, as well as the United States, are among the other entities that own shares of the companies.
We hope that you like our this guide on where does Canada get its oil from. Whatever your point of view, Canada’s oil business is one that is expected to continue to grow for a very long time.
With the construction of many new pipelines, like the Keystone XL Pipeline as well as the Trans Mountains Expansion Project, Canada hopes to meet the demand for its products while also breaking into new markets. We hope now you know where does Canada get its oil from.
Although over a dozen businesses run refineries in Canada, only Imperial Oil, Shell Canada, and Suncor Energy run multiple refineries and distribute goods across the country.
1. From where does Canada purchase its oil from?
Canada continues to import the majority of its crude oil from the United States (U.S.). As opposed to 75% in 2020, 66% of Canada’s oil imports in 2021 came from the United States.
2. Does Canada engage in producing its own oil?
Oil and natural gas are produced in Canada in greater quantities than are required to meet domestic energy needs, hence the surplus is exported. Currently, the United States is the only country to which practically all of Canada’s exports of oil and natural gas flow.
3. Is Canada’s oil industry prosperous?
Canada is the sixth-largest generator of natural gas in the world and the fourth-largest producer of oil.