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Tag: oil exports

  • Mark Carney says Canada’s trading relationship with the U.S. was ‘once a strength,’ but ‘now a weakness’ | Fortune

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    TORONTO (AP) — Canadian Prime Minister Mark Carney and the premier of Canada’s oil rich province of Alberta agreed Thursday to work toward building a pipeline to the Pacific Coast to diversify the country’s oil exports beyond the United States.

    The memorandum of understanding includes an adjustment of an oil tanker ban off parts of the British Columbia coast if a pipeline comes to fruition.

    Carney has set a goal for Canada to double its non-U.S. exports in the next decade, saying American tariffs are causing a chill in investment.

    Alberta Premier Danielle Smith said the agreement will lead to more than 1 million barrels per day for mainly Asian markets so “our province and our country are no longer dependent on just one customer to buy our most valuable resource.”

    Carney reiterated that as the U.S. transforms all of its trading relationships, many of Canada’s strengths – based on those close ties to America – have become its vulnerabilities.

    “Over 95% of all our energy exports went to the States. This tight interdependence – once a strength – is now a weakness,” Carney said.

    Carney said a pipeline can reduce the price discount on current oil sales to U.S. markets.

    He called the framework agreement the start of a process.

    “We have created some of the necessary conditions for this to happen but there is a lot more work to do,” he said.

    Carney said if there is not a private sector proponent there won’t be a pipeline.

    The agreement calls on Ottawa and Alberta to engage with British Columbia, where there is fierce opposition to oil tankers off the coast, to advance that province’s economic interests.

    Former Prime Minister Justin Trudeau approved one controversial pipeline from the Alberta oil sands to the British Columbia coast in 2016 but the federal government had to build and finish construction of it as it faced opposition from environmental and aboriginal groups.

    Trudeau at the same time rejected the Northern Gateway project to northwest British Columbia which would have passed through the Great Bear Rainforest. Northern Gateway would have transported 525,000 barrels of oil a day from Alberta’s oil sands to the Pacific to deliver oil to Asia, mainly energy-hungry China.

    The northern Alberta region has one of the largest oil reserves in the world, with about 164 billion barrels of proven reserves.

    Carney’s announcement comes after British Columbia Premier David Eby said lifting the tanker ban would threaten projects already in development in the region and consensus among coastal First Nations.

    “The pipeline proposal has no project proponent,” he said. “Not only does it have no permits, it doesn’t even have a route.”

    Eby said the agreement is a “distraction” to real projects and does not have the support of coastal First Nations.

    “We have zero interest in co-ownership or economic benefits of a project that has the potential to destroy our way of life and everything we have built on the coast,” Coastal First Nations President Marilyn Slett said.

    The agreement pairs the pipeline project a proposed carbon capture project and government officials say the two projects must be built in tandem.

    The agreement says Ottawa and Alberta will with work with companies to identify by April 1 new emissions-reduction projects to be rolled out starting in 2027.

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    Rob Gillies, The Associated Press

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  • What oil CEOs really think about Trump’s management of the oil sector: ‘Those who can are running for the exits’ | Fortune

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    Oil companies may have President Donald Trump cheering them on from the bully pulpit. But in the oil patch, the mood is anything but celebratory.

    New data on Wednesday from the Dallas Fed Energy Survey,  which polled oil and gas executives at 139 firms across Texas, northern Louisiana and southern New Mexico in mid-September, shows oil and gas activity slipped again in the third quarter of 2025, weighed down by soaring costs, policy uncertainty, and the chaos of new tariffs.

    The survey’s broadest measure of business conditions, the business activity index, came in at –6.5, marking the second consecutive quarter of contraction.

    The outlook was even gloomier. The company outlook index plunged to –17.6 from –6.4, while more than 44% of firms said uncertainty remains elevated. Production of both oil and natural gas ticked lower, while costs for everything from drilling to equipment leasing surged.

    ‘The noise and chaos is deafening‘

    Executives were blunt in the anonymous comments that come out with the survey each quarter.

    “The uncertainty from the administration’s policies has put a damper on all investment in the oilpatch,” one wrote. “Those who can are running for the exits.”

    Another added that “the administration’s tariffs, particularly on steel and aluminum at fifty percent, are increasing our cost of business.”

    For exploration and production firms, finding and development costs doubled this quarter, while lease operating expenses also jumped sharply.

    Oilfield services firms reported their margins are still deeply negative, with one describing the sector as “bleeding.”

    The tariffs are cutting deep: operators said higher costs for tubular steel, heavy material, and imported components are making wells uneconomic.

    “Tariffs continue to increase the cost of production. We are suffering from a combination of increased cost due to tariffs and downward pricing pressure from end users,” one services executive said.

    A grim investment climate

    That mix of weak prices and high costs has throttled capital spending. The survey found capital expenditures are falling sharply, with the index dropping to –11.6 from –3.0.

    One operator emphasized that the uncertainty from regulatory policy was putting a damper on the spending.

    “Day-to-day changes to energy policy is no way for us to win as a country,” the operator said. “Investors avoid investing in energy because of the volatility … and the ‘stroke of pen’ risk that the federal government wields.”

    The gloom is reflected in price expectations. Respondents now see West Texas Intermediate crude ending 2025 at just $63 a barrel,  barely above where it traded during the survey period. Two years out, the consensus rises modestly to $69, and to $77 five years from now, levels many independents say are too low to justify new drilling.

    The shale dream frays

    A decade ago, U.S. shale was hailed as the world’s most dynamic energy engine. Now, industry insiders describe it as broken, even as Trump removes tax credits for renewables.

    “The collapse of capital availability has fueled consolidation by the majors, pushing out independents and entrepreneurs who once defined the shale revolution,” one respondent said. “In their place, a handful of giants now dominate but at the cost of enormous job loss and the destruction of the innovative, risk-taking culture that made the U.S. shale industry great.”

    Others warned that the sector is being whipsawed by politics from both parties.

    “The sword being wielded against the renewables industry right now will likely boomerang back in 3.5 years against traditional energy,” one said, pointing to methane penalties and permitting fights that could return with a vengeance.

    While Trump insists domestic drilling will fuel an American energy renaissance, the very policies his administration is pushing are raising costs, curbing investment, and leaving many operators sitting on their hands.

    “The oil industry is once again going to lose valuable employees,” one executive lamented. “Drilling is going to disappear.”

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    Eva Roytburg

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  • Drone Attacks Menace Russia’s Key Route for Exporting Oil

    Drone Attacks Menace Russia’s Key Route for Exporting Oil

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    (Bloomberg) — A new front opened in Russia’s war on Ukraine that highlights the vulnerability of oil exports from the nation’s western ports, after reports of drone attacks against facilities on the Baltic coast.

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    Last week, the first ever Ukrainian drone reached Russia’s Leningrad region, some 1,000 kilometers (620 miles) from the border. That aircraft was downed over the privately-owned Petersburg Oil Terminal without causing damage, according to Russian authorities.

    A second drone attack on Sunday, which an official with knowledge of the matter said was organized by Ukraine’s secret services, was more disruptive. It caused a fire that shut down a Novatek PJSC gas-condensate plant in port of Ust-Luga that supplied fuel to the Russian army, according to the official who spoke on condition of anonymity.

    The facility was also close to some of Russia’s most important oil-export terminals. As the war in Ukraine once again enters a phase of attrition targeting energy infrastructure, these attacks are worrying oil-market watchers.

    “Regular attacks or heavier drones may disrupt Baltic port operations and cause reductions of export volumes,” said Sergey Vakulenko, an industry veteran who spent ten years of his 25-year career as an executive at a Russian oil producer. If that happened, “Russia would not have many viable alternatives.”

    Keeping Russia’s oil exports steady is crucial for the Kremlin, which receives some 30% of total budget revenues from the nation’s energy industry. The flow of petrodollars is helping to finance the war in Ukraine as it nears its third year, while also funding domestic spending in the run-up to presidential elections in March.

    A serious disruption to Baltic exports would also be felt around the world. Russia is a top-three global oil producer and the largest supplier to China last year. The crude market is already on heightened alert after attacks on shipping in the Rea Sea, and despite its support for Ukraine the West has long been reluctant to see Russian oil taken off the global market because of the impact it would have on prices.

    “A halt in Baltic exports would be a major shock,” said Viktor Kurilov, senior oil markets analyst at consultant Rystad Energy A/S.

    Two major Baltic oil terminals run by state-owned Transneft PJSC — Ust-Luga and Primorsk — shipped around 1.5 million barrels a day, more than 40% of the Russia’s total seaborne crude exports on average from January to November last year, according to Bloomberg calculations based on the industry data. In addition, some cargoes of Kazakh crude are also loaded at Ust-Luga.

    The facilities load more than 75% of Urals, Russia’s main crude-export blend that is shipped to dozens of nations, according to data from intelligence firm Kpler.

    In the event of an attack, it would be next to impossible for the nation’s producers to redirect flows of this size to any other port, according to analysts.

    There are export terminals in the Barents Sea, but they are “accessible by rail only and have limited capacity,” said Vakulenkо, who is now a scholar at the Carnegie Endowment for International Peace in Berlin. “The route to China and Pacific ports is full, so not a single barrel can be diverted there.”

    The Black Sea port of Novorossiysk could accept an extra 300,000 barrels a day, not enough to cover for Ust-Luga flows, estimated Viktor Katona, Kpler’s lead crude analyst. In addition, Novorossiysk is even more vulnerable to air drones attacks from Ukrainian territory and there is also a threat from marine drones, Vakulenko said.

    Crude exports were briefly halted on Sunday after the drone attack on the Novatek facility, but resumed on Monday morning, according to vessel-tracking data compiled by Bloomberg. Right now the risk of a full halt in Baltic shipments seems minimal, said Rystad’s Kurilov.

    To counter further attacks, Russia has put its key infrastructure in the Baltic Leningrad region on “high-alert mode,” according to the regional authorities.

    “Security units and law enforcement agencies received orders to destroy unmanned aerial vehicles if they are detected in territories,” adjacent to the regional strategic infrastructure, the authorities said in a Telegram statement late on Sunday.

    (Updates with comment from an official in third paragraph.)

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