Key Takeaways
- Export diversification can reduce reliance on one customer, but only if projects deliver competitive returns after all costs.
- Oil and LNG require different infrastructure, customer access and investment tests for overseas sales.
- New export projects should be tested against weaker demand, lower prices, cost overruns and emissions requirements.
Can Canada Gain Economic Power by Selling Oil and Gas to More Countries?
Canada could benefit from selling oil and gas to a wider range of countries, provided those sales generate returns after infrastructure, financing and delivery costs. More export options could reduce dependence on the United States. Their value depends on competitive projects, reliable customers and a realistic assessment of climate impacts and future demand.
Canada has substantial energy resources. Its challenge is turning that wealth into lasting economic flexibility.
In 2025, the United States received 90.1% of Canadian crude oil exports, according to the Canada Energy Regulator.
That relationship gives Canadian producers a major customer close to home. It also concentrates their exposure to changes in one foreign market.
The question is whether reaching more customers would create enough value to justify the costs—and whether stronger energy trade would give Canada greater influence abroad.
Why Does Canada Export Most of Its Oil to the United States?
The United States buys most Canadian crude oil exports because geography, established pipelines and refinery relationships connect Canadian production with American demand.
Those connections offer practical advantages. Producers have established transportation routes, and customers can obtain Canadian supplies through an integrated continental energy system.
In 2025, Canada supplied 63.4% of American crude oil imports. The relationship therefore matters to both countries. Source: Canada Energy Regulator
However, a valuable customer can still be a source of concentrated risk.
If American purchasing patterns or trade conditions change, Canadian producers cannot immediately send every affected barrel elsewhere. Redirecting exports requires transportation capacity, terminal access and buyers willing to purchase the available crude.
This reflects the broader challenge explored in Can Canada Escape America’s Economic Grip—or Is It Trapped by Geography?: established supply chains make trade convenient, but they can also limit alternatives.
Diversification would give producers more choices when market conditions change. Whether those choices improve earnings depends on their cost.
Oil and Natural Gas Need Different Export Strategies
Crude oil and natural gas face different transportation requirements, so their export opportunities should be assessed separately.
Crude oil can move through pipelines to a coastal terminal and then travel overseas by tanker. Natural gas generally needs to be converted into liquefied natural gas, or LNG, for large-scale ocean transport.
LNG is natural gas cooled into liquid form. Exporting it requires liquefaction facilities and specialized ships, followed by receiving facilities that convert it back into gas.
| Factor | Crude oil exports | LNG exports |
|---|---|---|
| Route to overseas customers | Transportation to a marine terminal, followed by tanker shipment | Gas transportation, liquefaction, specialized shipping and receiving facilities |
| Key costs | Production, pipeline or other transport, terminal handling and shipping | Gas supply, liquefaction, shipping and associated infrastructure |
| Customer requirements | Refineries able and willing to process the crude | Buyers with access to LNG receiving and regasification facilities |
| Main investment test | Whether the selling price covers the full cost of delivery | Whether contracted or expected revenues justify the full supply chain |
Higher overseas prices do not necessarily mean higher profits. The relevant measure is what producers retain after getting the product to the buyer.
What Has Already Changed in Canada’s Export Access?
The Trans Mountain expansion and LNG Canada have created additional routes to overseas markets.
The expanded Trans Mountain system began commercial operations on May 1, 2024, with transportation capacity of 890,000 barrels per day. This is the capacity of the overall system, rather than a measure of actual overseas shipments. Source: Canada Energy Regulator
Statistics Canada reports that exports of crude oil and equivalent products to destinations outside the United States more than doubled in 2025. Those destinations accounted for 10.9% of exports, compared with an average of 2.8% between 2016 and 2024. This broader product category differs from the crude-only measure used in the opening section. Source: Statistics Canada
Natural gas has gained an overseas outlet as well.
LNG Canada loaded its first export cargo in Kitimat, British Columbia, on June 30, 2025. Its first two processing units have a combined design capacity of 14 million tonnes annually. Design capacity describes potential output; it does not establish actual annual shipments or profitability. Source: LNG Canada
These developments demonstrate that export diversification is possible. Each additional project still needs to establish its own economic case.
Could Canada Sell More Energy to Europe and Asia?
Canada could compete for additional overseas customers if its delivered supplies meet their needs on price, reliability and contract terms.
Reaching a coastline is only part of that calculation. Buyers compare the complete cost of obtaining energy from Canada with available alternatives.
For a Canadian exporter, the assessment runs in the opposite direction: start with the expected selling price, then subtract production, processing, transportation, financing and other costs.
A more distant customer could offer a higher price but a lower return after delivery expenses. A closer customer offering less might remain more profitable.
Long-term purchase agreements can make future revenues more predictable. Their strength depends on pricing terms, purchase obligations and the buyer’s ability to honour them.
Customer diversity also matters. Replacing one dominant buyer with another would change Canada’s exposure without necessarily reducing it.
That concern is explored in Canada–China Trade: Economic Opportunity or Security Risk?.
A stronger export position would give producers several commercially viable options, with enough flexibility to respond when conditions change.
Would More Oil and Gas Exports Give Canada Greater Global Influence?
Energy exports could deepen commercial relationships and create opportunities for diplomatic cooperation. They would not guarantee support for Canada’s foreign-policy positions.
A customer relying on Canadian supplies has an interest in dependable deliveries. That relationship can encourage investment, regular government contact and cooperation on shared concerns.
But buyers retain their own priorities. Their willingness to support Ottawa in a dispute depends on interests extending well beyond an energy contract.
There is also a distinction between influence for Canada and bargaining power for individual producers.
A producer able to sell into several markets may gain commercial flexibility. Translating that advantage into national diplomatic influence requires coordination, dependable partnerships and circumstances in which the energy relationship actually matters.
The clearest potential benefit of diversification is therefore economic choice. Greater geopolitical influence is a possible outcome, rather than an automatic return.
What Infrastructure Would Canada Need?
Additional exports require a complete, dependable route from production to paying customers.
Depending on the project, that could involve pipeline capacity, marine terminals, LNG facilities or improvements to existing connections.
The assessment must include construction and operating costs, environmental effects, Indigenous rights and participation, regulatory requirements and financing.
Canada’s access to multiple oceans does not make every proposed route commercially viable. Distance from production, operating conditions and customer access all affect the result.
The Northwest Passage sometimes enters discussions about Canada’s future shipping options. However, it should not be assumed to offer a ready alternative for energy exports. Its navigation challenges and sovereignty questions warrant separate scrutiny, as discussed in Why Canada and the U.S. Disagree Over the Northwest Passage.
The practical priority is identifying routes that can deliver reliably at a cost customers will support.
How Do More Exports Fit With Canada’s Climate Goals?
Additional fossil fuel exports raise climate questions because emissions occur during production, processing and transportation, and when the fuels are consumed.
Canada has a legislated commitment to reach net-zero greenhouse gas emissions by 2050. Source: Government of Canada
In 2024, the oil and gas sector produced 30% of Canada’s total greenhouse gas emissions, making it the country’s largest emitting economic sector. This domestic figure does not include all emissions from Canadian fuels burned overseas. Source: Environment and Climate Change Canada
Supporters of expansion argue that Canadian supplies can meet demand while importing countries change their energy systems. Critics question whether new projects could increase emissions and prolong fossil fuel use.
Evaluating those arguments requires a comparison with what would happen without the project.
Would Canadian supplies replace fuel from another producer, substitute for a different energy source or support additional consumption? What emissions would arise across production, shipping and use?
A claim that an export project reduces global emissions needs evidence answering those questions.
Lower emissions per unit of production can improve efficiency. Total emissions also depend on the volume produced and consumed.
What If Canada Invests Billions and Demand Changes?
New infrastructure can become less profitable if demand weakens, competing supplies expand or construction costs exceed expectations.
Consider a hypothetical LNG project intended to operate for 30 years.
Customers might continue purchasing substantial volumes throughout that period. Alternatively, changes in electricity generation, efficiency or industrial activity could reduce demand faster than investors expect.
Even sustained demand would not guarantee strong returns if competitors supplied the market more cheaply.
A project should therefore be tested against several plausible conditions:
| Test | What it reveals |
|---|---|
| Lower selling prices | Whether revenues can still cover operating and financing costs |
| Higher construction costs | Whether the investment remains attractive after overruns |
| Weaker customer demand | How exposed the project is to reduced purchases |
| Stronger competition | Whether Canadian supplies can retain customers |
| Changing emissions requirements | How compliance costs affect viability |
These are decision tests, rather than predictions. Their purpose is to show how much uncertainty a project can withstand.
Investors and governments should also establish who bears the losses if expected revenues fail to materialize, particularly when public funding or guarantees are involved.
TwikUp Insights: Judge Export Projects by the Choices They Create
Canada’s energy debate needs to distinguish three decisions: producing more fuel, reaching more customers and committing money to new infrastructure.
They are connected, but they are not interchangeable.
An additional route could help existing production reach a wider market. Higher production could still flow mainly to the United States. A new facility could increase capacity without earning an adequate return.
TwikUp’s assessment is that a strong export proposal should pass four tests:
- Commercial value: expected revenues justify the full cost of delivering the energy.
- Meaningful diversification: the project creates dependable alternatives to existing customers or routes.
- Resilience: the investment remains credible under less favourable prices, costs and demand.
- Environmental accountability: its impacts and emissions assumptions are clearly assessed.
This framework allows room for projects that improve Canada’s position while exposing proposals whose strategic claims exceed their likely benefits.
Canada’s resources provide an opportunity. Lasting economic strength depends on whether the country can turn them into profitable, dependable choices without taking on costs that outweigh the flexibility gained.