AleksTaurus / Depositphotos.com
CALGARY — Canada’s oil industry is deepening its focus on China as a key growth market as rising exports to Asia coincide with improving global oil prices and tightening North American supply conditions.
Canadian oil production reached record levels in the first half of 2025, averaging about 5.19 million barrels per day, supported by steady oil sands output and new export capacity to the Pacific coast. Exports to China climbed to nearly 89 million barrels last year, more than four times the previous level, following the start-up of the Trans Mountain Expansion pipeline in May 2024, which allows Alberta crude to reach Asian markets directly.
China’s refining system is well suited to Canada’s heavy, high-sulphur crude, and analysts say demand from Chinese buyers has grown as U.S. oil shipments to China have declined. The increase in Asian sales has helped Canadian producers diversify beyond the U.S. market, which still absorbs the majority of Canadian oil exports.
The growing commercial relationship aligns with commitments reaffirmed earlier this month during a China–Canada leaders’ meeting in Beijing. In a joint statement, the two sides said they remain committed to advancing their strategic partnership in the spirit of mutual respect, equality and mutual benefit, with the aim of delivering positive outcomes for both countries.
Energy cooperation was identified as a key area of mutual interest. The statement said both countries agreed to support exchanges and cooperation in clean energy and to strengthen cooperation in conventional energy such as oil and gas resource development. Leaders also agreed to launch a new ministerial-level energy dialogue to support two-way investment and trade in both clean and conventional energy.
Embassy staff said they look forward to strengthening practical cooperation between the two countries under the strategic guidance of the two leaders.
The export shift comes as oil prices have strengthened in recent weeks. U.S. government data released Wednesday showed crude oil inventories fell by 2.3 million barrels in the week ending Jan. 24, bringing commercial stockpiles to about 423.8 million barrels, roughly three per cent below the five-year average for this time of year. The drawdown followed earlier industry data pointing to falling inventories and was attributed in part to winter storm-related supply disruptions.
Benchmark prices moved higher in early trading, with Brent crude rising to about $68 per barrel and U.S. West Texas Intermediate trading near $63 per barrel, both up week over week. Analysts say firmer prices and tighter inventories have improved the outlook for producers exporting long-lived, heavy crude supplies.
Canadian oil companies have responded with increased capital spending and modest production growth plans. Shares of major producers are near decade highs, reflecting investor confidence in stable output and expanding access to Asian markets, particularly China.
While Canada continues to send most of its oil to the United States, growing Asian demand has strengthened the commercial case for additional west coast export capacity. Alberta has indicated proposals for further pipeline routes to tidewater could advance later this year.
Energy analysts say Canada’s large reserves, reliable production and improved export infrastructure position the country as a durable supplier to China over the long term, particularly as Asian refiners seek consistent access to heavy crude amid changing global supply patterns.
Comments