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AMERICAS OIL: Tariffs on Canada Oil to Hurt Midwest Refiners' Costs, Logistics

AMERICAS OIL
USEnergy BulletsNorth AmericaBulletCommodities

Tariffs on Canadian Oil to Hurt Midwest Refiners' Costs, Logistics, RBC Says -- OPIS

  • The Royal Bank of Canada said on Wednesday that potential U.S. tariffs on Canadian oil imports would likely raise operating costs for Midwest refineries, which would have to make changes to process lighter grades of crude or find other sources of heavy crude.
  • The bank said imports of Canadian oil can strengthen U.S. energy reserves and lower consumer costs by helping meet growing U.S. demand.
  • President Trump in early February paused for 30 days a planned 10% tariff on U.S. imports of Canadian crude oil and a 25% tariff on Mexican oil imports after the two countries agreed to beef up border security.
  • RBC said Trump's decision to impose less-punitive 10% tariffs on Canadian energy reflects the strategic importance of those resources to American interests.
  • Canada currently accounts for 60% of U.S. total oil imports and its share has grown sharply over the past several decades to 24% of total U.S. oil consumption.
  • RBC also said the tariff would affect the Trans Mountain pipeline expansion that began service in May and supplies U.S. West Coast refineries. The project has nearly tripled Canada's oil export capacity via its West Coast terminals, playing a key role in supporting Asian allies like South Korea and Japan.
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Tariffs on Canadian Oil to Hurt Midwest Refiners' Costs, Logistics, RBC Says -- OPIS

  • The Royal Bank of Canada said on Wednesday that potential U.S. tariffs on Canadian oil imports would likely raise operating costs for Midwest refineries, which would have to make changes to process lighter grades of crude or find other sources of heavy crude.
  • The bank said imports of Canadian oil can strengthen U.S. energy reserves and lower consumer costs by helping meet growing U.S. demand.
  • President Trump in early February paused for 30 days a planned 10% tariff on U.S. imports of Canadian crude oil and a 25% tariff on Mexican oil imports after the two countries agreed to beef up border security.
  • RBC said Trump's decision to impose less-punitive 10% tariffs on Canadian energy reflects the strategic importance of those resources to American interests.
  • Canada currently accounts for 60% of U.S. total oil imports and its share has grown sharply over the past several decades to 24% of total U.S. oil consumption.
  • RBC also said the tariff would affect the Trans Mountain pipeline expansion that began service in May and supplies U.S. West Coast refineries. The project has nearly tripled Canada's oil export capacity via its West Coast terminals, playing a key role in supporting Asian allies like South Korea and Japan.