Canada's oil boom hits record highs—but pipelines hold it back

Canada has become a major player in the global oil market, ranking as the world's fourth-largest producer. The country is now pushing to expand its fossil fuel exports beyond North America. However, limited pipeline access to coastal ports remains a key challenge for further growth.

In early 2025, Canada's oil production reached a record high of 5.19 million barrels per day. This surge followed the completion of the Trans Mountain Expansion pipeline in 2024, which allowed crude exports to Asia for the first time. Sales to China alone quadrupled in 2025, reducing Canada's reliance on the US market, where over 90% of its oil is currently sold at a discount.

The financial impact has been significant. Canadian oil producers have seen their shares climb to near-decade highs, with the four largest firms gaining over 40% since early 2026. Analysts estimate that if oil prices stay at current levels—boosted by geopolitical tensions like the Iran conflict—Canadian companies could earn up to C$90bn ($65.6bn) in extra revenue. Every $10 rise in oil prices this year could add another C$25-C$30bn to their earnings. Despite this growth, no new pipeline projects for Asian exports have been approved since May 2024. The Trans Mountain Expansion was the last major project greenlit, while others, such as Northern Gateway and Energy East, remain blocked or abandoned. François Poirier, CEO of TC Energy, has urged regulatory reforms to speed up pipeline construction, arguing that Canada's stable energy supply strengthens its role as a dependable global supplier.

Canada's oil industry is benefiting from higher production and new export routes, but pipeline constraints still limit its full potential. With shares rising and revenues climbing, the sector's future growth depends on overcoming infrastructure bottlenecks. For now, the country remains heavily reliant on US buyers, where pricing discounts continue to cut into profits.