Canadian crude exports sink 55% after the oil price crash
Statistics Canada stated, on Thursday, that Canada’s energy exports dived by their highest on record. Crude oil exports from the country plunged by 55.1% due to the crash in the price and demand of oil. Canada’s national statistical agency reported the lowest levels in total commodity trade in a decade.
The coronavirus outbreak and the lockdowns to curb the spread of the virus crushed the oil demand in the US, Canada’s most significant export market. The exports of energy commodities dropped by US$2.66 billion, which is the most substantial decrease in history. These decreases are mostly because of the fall in crude oil exports.
Canada’s statistics office affirmed that April saw reduced demand for energy exports because of control measures. It caused an extreme drop in crude oil prices, along with lowered export volumes.
The WCS is the benchmark price of oil from the country’s oil sands delivered to Hardisty. Usually, it tracks the trend in prices of WTI, the US benchmark, which hit a negative price in April.
Canada’s oil imports dropped too. This was the result of the closure of several Canadian refineries that import the commodity.
Besides energy trade, the country saw its most significant decrease in imports and exports in the automotive sector due to factory closedowns.
Over the past two months, many Canadian companies were forced to cut dividends and halt massive oil outputs given the unsustainably low prices.
Canada is the world’s 4th largest oil exporter
Oil sands production accounted for 67% of Canada’s total crude oil output in 2018. With more improvements in technology and production processes, the oil sands industry could be a significant growth driver for the country’s economy, similar to the recent shale boom in the US.
Analysts have estimated the country’s reserves to be at 175,000 million barrels. These barrels were a mixture of mud, sand, and crude oil. Canada has the third-largest oil reserves in the world and is the world’s fifth-largest oil producer and the fourth-largest oil exporter.
Although the country is one of the largest oil producers and exporters globally, it imports significant amounts of oil into its eastern provinces. The country’s pipelines do not span the entire country’s width; many of its oil refineries cannot handle the types of oil their oil fields produce.
Canada exports most of its oil production to the US. The US, by use of pipelines, is the leading supplier of crude and derivatives.
According to some unofficial information, last year, Canada’s oil production was at 3,483,000 barrels per day, exceeding the initial estimates.
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