Trade - Crude Oil Market

Canada is a net exporter of petroleum products. Yet, at times, product imports can play a significant role in satisfying petroleum product demand. The availability of both crude oil and petroleum product imports in every region hinges on geographic constraints. Each of these regions has its own natural features and this creates some unique situations.

Some regions are better suited than others to import products. Because of their connection via major waterways, Atlantic Canada and Quebec have good access to supplies from the northeastern United States and Europe. Because of there easy access to water for both importing crude oil feedstocks and for exporting petroleum products, Atlantic Canada has two large export refineries that send large portions of their output to market on the U.S. eastern seaboard. When economic conditions are favourable, East Coast Canadian refiners have sent products to markets as far away as California.

Ontario also has access to supplies from large U.S. markets and can also bring in provisions via Quebec. However, logistical constraints, such as the size of ships that can navigate the Seaway and the seaway-shipping season, increase the cost of these supplies. Other modes of transportation, such as pipeline, unit train and trucking, are necessary to bring in products from other regions.

Western Canada is landlocked, and as such, has very limited access to supplies from other regions. The current infrastructure was not designed to transport supplies to the Prairies from other regions. However, the prairies supply a substantial volume of gasoline into the Vancouver market. In the event of a supply shortage in the Prairies, refiners have the ability to balance supply and demand by importing product into Vancouver from Washington State. This frees up additional product from Edmonton area refiners to be distributed to prairie markets.