[Text/Observer Network Qi Qian] In May last year, the expansion project of the Trans Mountain (TMX) oil pipeline in Canada began to transport oil from Alberta Province to the Pacific Coast port in British Columbia, and has been in operation for a year. On May 16, Reuters cited data stating that due to US President Trump's initiation of a global trade war, China has become the largest customer of Canadian oil transported through this pipeline.

Canada is the world's fourth-largest oil producer, but its main oil-producing province, Alberta, is landlocked with limited access to ports. This means that the majority of Canada's oil (about 4 million barrels per day, accounting for 90%) is exported to the United States via north-south pipelines.

According to reports, the TMX pipeline, which cost approximately $24.4 billion, is Canada's only east-west oil pipeline, transporting oil to the Pacific coast and then loading it onto tankers for export. On May 1, 2024, the expanded TMX pipeline began operations, increasing its capacity threefold to 890,000 barrels per day, and opening up opportunities for Canada to expand its oil exports to markets in the western United States and Asia.

Data from shipping tracking agency Kpler shows that since the expanded TMX pipeline was fully operational, Canada has averaged about 207,000 barrels of crude oil exported to China daily. By contrast, the average daily oil exports from Canada to China over the past decade until 2023 were only about 7,000 barrels. During the same period, the United States transported about 173,000 barrels of oil daily through this pipeline.

Reuters reported that China becoming the largest buyer of oil from the TMX pipeline has overturned some initial expectations. They had anticipated that these oils would be shipped to the west coast of the United States, where the U.S. would become the largest buyer, as Asia could obtain cheaper Russian oil.

However, after Trump took office, he wielded the tariff stick, threatening to "annex" Canada, leading to tense relations between the two countries, long-time allies. The report suggests that although oil is currently not subject to U.S. tariffs, under the threat of the Trump administration, Canada has been seeking to diversify its exports.

Philip Roth, director of the China Institute at the University of Alberta, said that in recent months, Trump's protectionist policies have made Canadian oil more attractive to Chinese buyers. He added: "Many Chinese refineries are also concerned about U.S. sanctions and have been working hard to reduce their dependence on oil from Venezuela, Russia, and other regions."

Trans Mountain Pipeline (TMX) Diagram TMX Pipeline Official Website

Data from Statistics Canada shows that in the year since the expansion of the TMX pipeline, Canada's crude oil exports to countries other than the United States have increased by nearly 60%, reaching a record high of 183,000 barrels per day in 2024. Shipping tracking data shows that countries importing Canadian crude oil, apart from China and the United States, include South Korea, Japan, India, and Brunei.

The report stated that in recent months, some Canadian politicians have called for new pipelines to coastal export terminals to reduce reliance on the United States. The operator said they were considering an expansion project that could increase the pipeline's transport capacity by 200,000 to 300,000 barrels per day.

According to documents submitted by the TMX operating company to the Canadian Energy Regulatory Authority, by 2024, the average full load rate of the TMX pipeline will be about 77%, lower than the company's forecast of 83%, partly due to the operator charging high tolls to compensate for cost overruns during construction. It is expected that the pipeline's full load rate this year will reach 84%, rising to 92% by 2027.

Skip York, chief energy strategist at U.S. Turner Mason Energy, said that given China's increasing desire to find new, stable crude oil supplies, much of the additional capacity of the TMX pipeline is likely to go to Asia rather than the west coast of the United States. He said, "I believe you'll see almost all the new oil shipments heading westward, exported to China."

It is worth noting that as Canada reduces its oil exports to the U.S., China is also reducing its oil imports from the U.S.

Data from April showed China shifting from U.S. oil to Canadian oil Bloomberg Chart

According to a Bloomberg report in April, after Trump initiated the trade war, China reduced its purchases of U.S. oil by approximately 90%, now importing a record amount of Canadian crude oil. This is another example of how Trump's attempt to reshape global trade relations has caused economic and strategic chaos.

Data shows that in March, the volume of crude oil imported by China from Vancouver, near Alberta, surged to an unprecedented 7.3 million barrels. Meanwhile, China's crude oil imports from the U.S. fell sharply from a peak of 29 million barrels in June last year to just 3 million barrels per month.

"Given the ongoing trade war, China is unlikely to import more U.S. oil," said Jian Wenran, director of the Canada-China Energy and Environment Forum, in a telephone interview at the time. "China will not rely solely on Russia or the Middle East; any oil supply from Canada will be good news."

This article is an exclusive piece by the Observer Network and cannot be reprinted without permission.

Original source: https://www.toutiao.com/article/7505042372204905012/

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