Canada’s Oil Pivot to Asia Is Starting to Materialize

Trans Mountain has filled its current capacity and is moving ahead with planned increases that will shift more Canadian crude toward Asian markets. The pipeline now carries 890,000 barrels per day from Alberta to British Columbia, and the operator intends to add 90,000 bpd in the fourth quarter and a further 210,000 bpd by the end of 2028, lifting capacity to about 1.19 million bpd.

Ship movements already reflect that market tilt: roughly two-thirds of tankers departing the Westridge Marine Terminal are bound for Asia, with China the largest buyer and India, Japan, South Korea and Vietnam expected to increase purchases. Thailand was also identified as a potential new customer. Canadian heavy crude is well suited to the complex refinery configurations common in Asia, supporting the shift in trade flows.

Geopolitical developments have added urgency to the pivot. The Iran war has been cited as another reason Asian refiners value barrels loaded in British Columbia, since those shipments avoid transit through the Strait of Hormuz. At the same time, Canada’s output is expanding: production this year is forecast to exceed last year’s record 5.3 million bpd, making Canada the world’s fourth-largest oil producer.

Historically, most Canadian exports flowed to the United States, with roughly 4 million bpd shipped south to Midwest and Gulf Coast refineries. Growing Pacific export capacity, including plans announced in July for another Alberta-to-Pacific pipeline, gives producers additional outlets and should ease sales once scheduled maintenance (expected to remove about 300,000 bpd in September) is completed and inventories recover.