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Canadian Crude Oil Plays Vital Role in U.S. Refineries and North American Energy Security

2024-03-03 16:23:28.228000

The discount for Canadian heavy crude oil has widened slightly due to refinery turnarounds and increased oil sands supply [9ed73a81]. The start-up of the Trans Mountain pipeline expansion is expected to help narrow the differentials next year, but the project has faced delays due to environmental non-compliances [9ed73a81]. U.S. refineries heavily rely on Canadian crude oil for North American energy security, with Canada supplying more than one-fifth of the crude oil refined in the U.S. [409bf405] [d1e125fb]. Canadian crude oil, including heavy oil, is converted into transportation fuels, chemicals, and plastics by U.S. refineries [d1e125fb]. Canadian crude oil imports to U.S. refineries have risen from over 1.3 million barrels per day in 2000 to just under 3.8 million barrels per day in 2022 [d1e125fb]. The per cent of Canadian crude in U.S. refinery feedstock has risen from nearly 9% in 2000 to over 23% by the end of 2022 [d1e125fb]. The symbiotic relationship between Canadian crude oil exports and the U.S. refining industry underscores a vital component of North American energy security [409bf405]. The U.S. refining industry has a total refining capacity of nearly 17.8 million barrels per day in 2022 [d1e125fb]. The industry is projected to spend over $428 billion between 2024 and 2030 [d1e125fb]. The U.S. refining industry has an estimated direct and indirect economic impact of 1.6 million jobs, $206 billion in labor income, $577 billion in direct and indirect value-added, and $1.6 trillion in outputs [d1e125fb]. Limiting access to Canadian crude oil for U.S. refineries would risk North American energy security and require increased imports from less-free countries [d1e125fb]. The enduring partnership between Canadian crude oil suppliers and U.S. refineries highlights the interdependence of the two countries in securing North American energy needs [409bf405]. Benchmark oil prices settled lower due to eased supply concerns and expectations of the US Federal Reserve halting interest rate hikes [9ed73a81].

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