Trump tariff threats are pushing Canada’s largest oil producer to break its

HOUSTON — The deeply integrated North American oil and gas market stands at crossroads, with Canada’s largest oil producer warning that it will diversify its exports away from the United States if President Donald Trump‘s tariff threats do not end.

Alberta Premier Danielle Smith on Wednesday presented two possible futures for the continent. In one, Canada and the U.S. reach an agreement to create “Fortress North America,” with new pipeline capacity built to support 2 million barrels per day in additional exports to the U.S. market, Smith said at the CERAWeek energy conference.

This will support Trump’s “energy dominance” agenda, Smith said, allowing the U.S. to increase its exports to the global market by backfilling those barrels with imported oil from a neighbor and close ally. It will maintain low consumer prices in the U.S., she said, which is also part of the agenda Trump campaigned on.

Alberta wants to supply the U.S. with the energy it needs to win the race against China to achieve dominance in artificial intelligence, Smith said. “I don’t think any of us want to see a communist, totalitarian regime become a world, global leader in AI,” the premier said.

In the other future, Trump continues to wage his trade war against Canada and Alberta starts looking for oil and gas customers beyond the U.S., Smith said.

Canada is the fourth largest oil producer in the world and Alberta is the country’s biggest producer. Some 97% of the country’s 4 million bpd of oil exports went to the U.S. in 2023 with several European nations and Hong Kong taking the remainder, according to Canada’s energy regulator. Alberta supplied 87% of the oil exported from Canada to the U.S. in 2023.

“There are at least six or seven projects that are emerging in Canada in the event we’re not able to come to a partnership agreement with the U.S.,” Smith said.

The uncertainty caused by Trump’s tariff threats has already forced Alberta to start “looking at more opportunities to get more barrels off our borders besides the United States,” provincial energy minister Brian Jean said Tuesday.

Alberta is in active discussions with South Korea, Japan and European nations about shipping oil exports to those countries, the energy minister said. “The truth is we’re looking in every direction right now except the United States in relation to our priorities,” Jean said.

Trump’s tariffs have roiled financial markets and caused confusion among investors over the past week. The president on Wednesday imposed 25% tariffs on steel and aluminum imports from Canada. He has paused until April 2 penalties on Canadian oil and gas as well as duties on other goods that are compliant with the trade agreement that governs North America.

The Trump administration has not provided clarity on how much of Canada’s energy exports to the U.S. conform…