Canada and Alberta Align on Oil Export Strategy Amid Changing Trade Dynamics
After years of tension, the Canadian federal government and Alberta have reached a consensus on enhancing oil exports. This shift comes in response to changing geopolitical and trade relations, particularly with the United States, which has historically been Canada’s primary trading partner. The Canadian government is now backing a new oil pipeline that will transport crude from Alberta to the West Coast, aiming to increase exports to Asia. This pipeline is expected to facilitate the shipment of approximately 1 million barrels per day (bpd) of crude oil, tapping into the growing demand in Asia, the world’s largest oil-consuming region.
The decision to support this pipeline reflects Canada’s strategic pivot to diversify its trade relationships, especially in light of tariffs imposed by the Trump Administration. Prime Minister Mark Carney’s government is focused on establishing Canada as an energy superpower, which includes expanding the export capacity of Alberta’s crude oil. Currently, over 95% of Canadian oil exports are directed to the United States, making this new pipeline crucial for reducing dependency on a single market.
The Trans Mountain Expansion (TMX) project is currently the only pipeline facilitating Alberta’s crude exports via tanker from the West Coast. With Alberta’s oil production reaching a record high of 4.1 million bpd in 2025, the TMX has played a significant role in this growth. The pipeline’s capacity was increased from 300,000 bpd to 890,000 bpd, enabling more efficient exports to Asia. As of October 2025, Alberta’s oil exports to Asia surged to over US$804 million, a significant increase from zero prior to the pipeline’s expansion.
Future Prospects for Alberta’s Oil Exports
The Canadian government is actively pursuing additional oil export routes to enhance Alberta’s energy economy. In November, an agreement was signed between the federal government and Alberta to boost oil exports to Asian markets while addressing investment uncertainties and emissions reductions. This agreement lays the groundwork for a new Indigenous co-owned pipeline, provisionally named the West Coast Oil Pipeline. Preliminary assessments for potential routes are currently underway, with Alberta planning to submit the project for national interest designation by July 2026.
Alberta is evaluating five potential ports on the West Coast for this new pipeline, with the port of Prince Rupert in northwest British Columbia emerging as a favorable option. Premier Danielle Smith highlighted the advantages of this location, suggesting it could facilitate a more efficient operation for exporting high-value products. However, the development of a new pipeline will likely involve complex negotiations with First Nations and the provincial government of British Columbia.
In the meantime, Trans Mountain Corporation is seeking to increase oil flows through the existing TMX pipeline by 10% by utilizing drag-reducing agents. This initiative aims to maximize the pipeline’s capacity while the federal government continues to explore the feasibility of new pipeline projects. As Alberta and the federal government unite in their efforts to expand oil export capabilities, the focus remains on reducing reliance on the U.S. market and meeting the growing energy demands of Asian markets.
