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As a data-driven organization, CAPP believes it is critical to provide the public with credible, clear and the most up to date information available. CAPP’s Data Centre is a central access hub for information and data related to the many facets of Canada’s upstream oil and natural gas sector.

Frequently Used Statistics

CAPP Statistics Handbook

S&P Global: Economic Impact Assessment of Canadian Conventional Oil and Gas

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Summary of Carbon Capture, Utilization and Storage in Canada

Carbon Capture, Utilization, and Storage (CCUS) is critical to Canada’s oil and gas industry

CCUS is vital for maintaining the global competitiveness of Canada’s oil and gas industry.

Canada is a global leader in CCUS

Canadian projects represent 11.5% of planned global CCUS storage capacity.
Major contributors to CCUS in Canada include oil refining and chemical production sectors.

Technological advancements are expanding opportunities to capture CO₂ across industries

Innovations include post-combustion, pre-combustion, direct air capture, and bioenergy CCS expand CO₂ capture opportunities.

Canada has a significant footprint of operational and planned CCUS projects

There is established infrastructure including the Alberta Carbon Trunk Line (ACTL).
There are successful projects operating in both Alberta and Saskatchewan.

CCUS in Western Canada has world-leading growth potential

Total sequestration capacity is growing significantly through planned projects: Ambition to scale CCUS capacity fivefold by 2030.
Abundant geological storage and world-class technical expertise are driving expansion.

Summary of Building Canada’s Future

The United States buys about 95% of Canada’s exported oil and 99% of our exported natural gas.
The main reason for this overreliance on a single customer is that Canada doesn’t have the infrastructure in place to directly access other global markets. Rather, we’ve seen hundreds of billions of dollars in export infrastructure projects get cancelled over the last decade.
Canada will likely continue to sell the majority or our oil and natural gas to the United States for decades to come because it is the largest energy market in the world and the countries are physically connected by borders and shared infrastructure.
However, recent trade tensions have awakened many Canadians to the fact we cannot take this relationship for granted, and we are not energy secure. Canada’s inability to access global markets or even provide citizens across the country with our own energy has become a threat to our very sovereignty.
Canada has opportunities to build a more resilient and prosperous economy. Major, economy-driving projects that can secure our energy future are waiting to be built. To act on these opportunities, we need a significant reset across Canada in terms of fiscal, tax, infrastructure, permitting, and energy and environmental policy.

Summary of Canada’s Reliance on the U.S. for Crude Oil and Natural Gas

Parts of Canada depend on the U.S. for crude oil, natural gas, and refined products. This reliance includes U.S. imports and Canadian-produced oil and gas that transit through the U.S. on their way to Ontario and Quebec. This dependence poses an energy security risk for all regions of Canada. If the U.S. were to cut off the delivery of these crucial commodities, Canada would face energy shortages and high prices.

Ontario and Quebec are particularly vulnerable. About half of the natural gas these provinces consume is imported from the U.S. Additionally, Ontario depends entirely on crude oil delivered via the U.S., with no immediate alternatives available. Quebec also relies on crude oil transiting the U.S. for about 60% of its refinery consumption. While there are options to deliver more Canadian natural gas via the TransCanada (TC) Canadian Mainline, the pipeline would likely require capital investment to increase its flow rate materially. To reduce Ontario’s dependency on U.S.-transited oil, Line 9 could be reversed (once again) to deliver offshore crude oil into Ontario from Montreal, but this cannot be done in the short term.

Alberta imports over 200,000 barrels per day of light condensate from the U.S. to blend with heavy bitumen for transportation. A curtailment of these imports could increase heavy oil producers’ costs and cause operational issues that could constrain production.

B.C., Quebec, and Ontario also depend on refined product imports from the U.S.

Summary of Canadian Exports of Crude Oil and Natural Gas

Crude Oil Export Highlights

After meeting domestic refining needs in Western Canada and Ontario, almost all Canadian crude oil production is exported to the U.S. Historically, limited access to tidewater ports, specifically in Western Canada, has prevented oil from being sold abroad. For context, Canada exported roughly 80% of its total oil supply to the U.S. in 2024.

Canada is the U.S.’s largest foreign crude oil supplier, making up over 60% of all U.S. imports in 2024, equating to roughly 9 times the next biggest supplier, Mexico. Canada’s dominant position is due to our trade history, geographic proximity, integrated pipeline infrastructure, and compatible heavy crude oil.

A lack of new pipeline takeaway capacity in recent years has ultimately limited the export potential for Canadian crude oil. The Trans Mountain Expansion Project (TMEP) has increased Canadian oil exports to the U.S. West Coast. TMEP will also present an opportunity to ship oil to Japan, India, and SE Asia.

Natural Gas Export Highlights

The North American shale revolution has altered the natural gas supply/demand dynamic, turning Canada’s sole export market, the U.S., into its main competitor. In 2024, Canada exported over 45% of its natural gas supply to the U.S. From 2010 to 2021, natural gas exports to the U.S. decreased by roughly 15% due to increased natural gas production in the northeast U.S., its main competitor.
In Canada, tight gas plays in the Montney, Deep Basin, Duvernay, and other northwest Alberta and northeast BC areas offer significant development potential. Like oil, the growth of gas exports has been limited by pipeline constraints and the inability to tap into global markets via liquefied natural gas (LNG).
Compared to the other top natural gas-producing countries, Canada has significantly lagged in the growth of its natural gas exports. Beginning in 2025, LNG exports from Canada’s West Coast, via LNG Canada, will facilitate expansion into global markets. LNG Canada, Canada’s first LNG export facility, successfully loaded its first cargo LNG in June 2025.

Summary of The Oil Sands

Oil Sands Overview

Roughly 159 billion barrels (+95%) of Canada’s total proved oil reserves are in the oil sands, more than every country in the world’s total proved oil reserves, except Venezuela, Saudi Arabia, and Iran.
Oil sands are extracted via surface mining or in-situ with the use of steam (i.e., SAGD, CSS). Combined, these two extraction methods accounted for over 3.5 MMB/d of Canada’s total oil production in 2024, close to 60%.

Fiscal Impact of the Oil Sands

In the fiscal year 2024-25, oil sands royalties of $17 billion were the largest single source of revenue for the Government of Alberta and more than 4× larger than combined conventional oil and natural gas royalties of $3 billion and $1 billion, respectively.
For context, in the fiscal year 2024-25, oil sands royalty revenue was greater than each of personal and corporate income tax of $16 billion and $8 billion, respectively, corresponding to over 20% of the Government of Alberta’s total revenue. Oil sands royalty revenue was equivalent to 67% of the province’s $26 billion healthcare operating expense budget in the fiscal year 2024-25.
Alberta’s bitumen royalty revenue is poised to increase in the years ahead as 38 projects transition from pre-payout to post-payout status, meaning they are subject to higher royalty rates. Higher royalty revenue allows for increased spending on public services such as healthcare, education, and social programs.

Summary of the Canadian Refining Industry

Introduction to the Canadian Refining Industry

Refineries are a critical piece of Canada’s energy story. Crude oil is the second largest type of energy consumed in the country, and refineries are the key step in turning the raw commodity into high-value final products. They also represent a key part of the Canadian economy. In 2024, Canada exported roughly $20 billion worth of refined petroleum products abroad.

Industry Overview

Across the country, Canada has 16 operating refineries (including two asphalt refineries) with a total refining capacity of 1.9 MMB/d, not including upgraders. Canada’s refinery capacity is primarily located in Eastern Canada, near large population centers, and in Alberta, near major oil-producing regions.
There is a co-dependency between Canada and the U.S. with regard to refineries. In Canada, refineries in the east are configured to handle lighter conventional crude oil, typical of that produced in the U.S. The U.S. now makes up nearly three-quarters of oil imports needed for Canadian refineries. In the U.S., many refineries have been configured with coking capabilities to handle the heavy sour crudes typical of those produced in Western Canada. Canadian refineries have limited heavy oil refining capacity, making Canada heavily dependent on the U.S. for refining these barrels.

Energy Security

Over the past decade, Canada has strengthened its continental energy security by reducing reliance on overseas oil and increasing the share of imports from the U.S. The only refinery still importing meaningful overseas oil is the Irving Oil refinery in New Brunswick.
Refineries in Eastern Canada depend on production from Canada and the U.S., and any curtailment of production would cause an energy shortage. Over the past several years, the Michigan State Government threatened to stop the operation of a key Enbridge pipeline segment (Line 5) that would have resulted in an energy shortage in Eastern Canada. In December 2023, however, state officials approved a tunnel under the Straits of Mackinac. A final approval from the U.S. Army Corps of Engineers would allow Enbridge to proceed in building the tunnel and ultimately continue operating the pipeline.

Sustainability

Several policies have been enacted to lower greenhouse gas (GHG) emissions at Canadian refineries and in the fuels. In Canada, the Clean Fuel Regulations, which came into force in the summer of 2023, should increase the adoption of alternative, lower-carbon fuels such as biofuels.

Canadian Oil and Gas Industry Overview

Canada in a Global Context

Canada is the fourth-largest global producer of crude oil and the fifth-largest producer of natural gas. It ranks as one of the least corrupt countries in the world, with low levels of corruption correlated to high levels of environmental performance. In an increasingly polarized world geopolitically, Canada accounts for one-sixth of the oil and gas production from countries within the Western Alliance and about 6% of global oil production.

Evolution of the Industry

Canada has been a trailblazer in the oil and gas industry since the inception of the modern petroleum industry in the 1800s. Over the more than 160 years of operating, Canadian producers have consistently innovated to adapt to new technology and a rapidly changing global environment. global environment.

Geology of the Western Canada Sedimentary Basin

The country’s large land base is home to many oil and gas deposits and play types thanks to a long, varied geologic history and complex tectonics. The Western Canada Sedimentary Basin, the largest producing basin in the country, stretches across four provinces and two territories.

Industry Structure

Canada is unique in that, on top of a prolific conventional oil and gas industry, much of the country’s production comes from the oil sands. Both the conventional and oil sands industries have seen significant innovations over the decades, both now routinely producing oil and gas from deposits that were once considered impossible to unlock hydrocarbons from.

Product Types and Location

Hydrocarbons include a spectrum of product types, from low-density, gaseous molecules like natural gas to high-density, viscous bitumen. All forms can be found and are produced in Canada.

Natural Gas Market Fundamentals

Natural gas markets tend to be more localized because of the technical and economic challenges in global trade and transportation of natural gas, even with the recent growth in liquefied natural gas (LNG). Due to the integrated nature of the North American natural gas market, and the relative size of the U.S. market compared to Canada, U.S. natural gas market dynamics can influence the Canadian natural gas market.

U.S. Natural Gas Supply

Based on the latest monthly Short-Term Energy Outlook from the U.S. Energy Information Administration (EIA) for October 2025, U.S. marketed* natural gas production is expected to average 117.7 Bcf/d in 2025, up 4.5 Bcf/d from 2024 levels. In recent years, supply growth has been driven mainly by gas-focused plays in the Appalachia and Haynesville regions following the shale revolution and significant associated gas growth from the Permian, an oil-focused play.

U.S. Natural Gas Demand and Net Exports

On the demand front, the EIA is forecasting average U.S. natural gas demand of 91.7 Bcf/d in 2025, up ~1.2 Bcf/d relative to 2024 (+1.3% Y/Y). Driven by LNG, net exports are expected to increase to 17.0 Bcf/d by 2026, resulting in a tightening supply/demand balance.

U.S. Natural Gas Storage

In North America, warmer-than-average temperatures were experienced during winter 2022/2023 and 2023/2024, leading to weak heating demand, which caused high natural gas storage levels that now sit well above five-year averages. Cold weather in winter 2024/2025 then helped tighten storage balances. According to the three-month weather outlook from the National Oceanic and Atmospheric Administration (NOAA) as of Sep. 18, 2025, warmer-than-average temperatures are forecasted across much of the Lower 48, which could temper demand heading into winter.

Natural Gas Benchmark Pricing

The primary benchmark pricing hub for natural gas sold in the U.S. is Henry Hub, located in Louisiana, while in Canada, the primary benchmark pricing hub is AECO, located in Alberta. Numerous factors can influence pricing at a particular hub, such as regional supply/demand, transportation costs, pipeline constraints, storage capacity, and/or weather.

Looking ahead, based on futures pricing, Henry Hub is expected to average US$4.03/MMBtu in 2026 in tandem with increased LNG export capacity in the U.S. In Canada, AECO is expected to average C$2.93/GJ in 2026, underpinned by the start-up of LNG Canada Phase 1 and an acceleration of LNG exports in the U.S. A severely oversupplied market in Canada with a lack of takeaway capacity has driven the divergence between AECO and Henry Hub in 2024 and 2025.

*Includes all quantities of gas used in field and processing plant operations.

Summary of Canada’s Offshore Oil & Gas Industry

While all of Canada’s current offshore production is concentrated in Newfoundland and Labrador, Nova Scotia has a history of oil & gas production. Although there are no active projects in offshore Nova Scotia today, the region still holds future development potential.

Offshore Exploration and Production Activity

From 1966-2024, roughly $81 billion dollars has been spent cumulatively, from inception to completion, on offshore oil & gas projects in Newfoundland and Labrador. In Nova Scotia, roughly $8 billion dollars has been spent cumulatively from 1998-2012 on offshore oil & gas development, from inception to completion.
Oil production in offshore Newfoundland and Labrador averaged approximately 209 MB/d in 2024, down over 40% from the peak in 2007 of 368 MB/d. Offshore production has declined since 2007 due to a confluence of factors, such as natural declines, lower oil prices, and cost and competitiveness. These factors have had a pronounced impact on capital-intensive offshore projects.
All four of Canada’s active offshore producing oilfields (Hebron, Hibernia, Terra Nova, and White Rose) are located in the Jeanne d’Arc basin. The projects are located roughly 300-350 km off the coast of Newfoundland.
The West White Rose facility, an extension to the the White Rose field, is currently in the midst of commissioning and start-up activities and is targeting first oil in 2026. Additionally, a final investment decision (FID) for the proposed Bay du Nord project is expected in 2027, with first oil potentially in 2031.
A series of independent resource assessments commissioned by the Government of Newfoundland and Labrador found there to be an estimated 123.5 billion barrels of oil and 292.6 trillion cubic feet (Tcf) of natural gas potential. Similarly, an independent resource assessment in 2023 from the Government of Nova Scotia found that the Scotian Basin in offshore Nova Scotia contains significant exploration opportunity with approximately 22.6 billion barrels of oil and 64.6 Tcf of natural gas potential.
Offshore natural gas production in Nova Scotia ended in 2018 following the decommissioning of the Deep Panuke facility. The development of low-cost natural gas in North America, particularly in nearby Pennsylvania, has driven the slowdown in offshore natural gas development. However, there is potential for future oil & gas development in offshore Nova Scotia.

Exports and Imports

In 2024, crude oil exports from Newfoundland and Labrador were approximately $7.5 billion, representing 55% of the province’s total exports of $13.6 billion.
Offshore oil & gas producers in Newfoundland and Labrador can leverage their strategic location along international shipping routes to gain unique access to global markets. There is no pipeline infrastructure linking offshore Newfoundland and Labrador crude oil inland to North American markets.
In 2024, total crude oil imports into Atlantic Canada were 286 MB/d (57% from the U.S.). The only remaining active refinery in Atlantic Canada is the Irving Oil Refinery in New Brunswick.
Canada’s lone liquefied natural gas (LNG) import terminal is located in Saint John, New Brunswick. Saint John LNG (formerly Canaport LNG) is a receiving and regasification terminal that supplies natural gas to the region to meet winter demand. When Nova Scotia was producing natural gas from 2000-2018, it was transported via the Maritimes & Northeast Pipeline to local and U.S. markets. The pipeline flow has since been reversed.

Economic Impact

Since 2007, as a percentage of total gross domestic product (GDP) in Newfoundland and Labrador, the oil & gas extraction sub-sector has ranged from 17-26%. By comparison, using this same measure, in 2024, the oil & gas extraction sub-industry accounted for 19% of the Alberta’s total GDP, which illustrates that both of the province’s economies similarly benefit from the oil & gas industry.
When including direct, indirect and induced jobs, there were 15,834 total jobs in Canada’s offshore oil & gas sector in 2023. From 2019-2023, total jobs (including indirect and induced) in Canada’s offshore oil & gas industry averaged over 17,000.
Offshore oil & gas capital expenditures (CAPEX) in Canada was $2.4 billion in 2023, down roughly 60% from the 2016 peak of $5.6 billion. There is significant offshore oil development potential in Atlantic Canada given its vast reserves and direct access to key markets in Europe. However, despite this potential, there has been no exploration drilling in offshore Newfoundland and Labrador to date in 2025, underscoring the investment uncertainty the industry faces.
Offshore royalties are a significant source of government revenue. For 2023-2024 (for the fiscal year ended March 31, 2024), Newfoundland and Labrador’s offshore royalties were $0.9 billion, representing roughly 10% of the government’s total revenue. Offshore royalties equated to over 50% of the government’s $1.7 billion of operating costs.

Alberta Oil & Gas Industry Overview

Alberta Oil & Gas Production

2024, Alberta’s total oil & gas production averaged approximately 6.7 MMBOE/d, equivalent to 75% of Canada’s total production on a barrels of oil equivalent (BOE) basis. Bitumen comprised the largest share of Alberta’s total hydrocarbon production in 2024 at 50%, followed by natural gas.
From 1950 to 2024, total hydrocarbon production in Alberta has grown by roughly 6% per year, on average.
In addition to being the largest producer of oil & gas in Canada, Alberta is also the largest exporter. In 2024, Alberta exported approximately 4.7 MMBOE/d of oil & gas, equating to $133 billion and representing over 70% of the province’s total exports.

Major Oil & Gas Plays in Alberta

Given its geography, Alberta has a wide mix of all hydrocarbon types, including conventional oil (light, medium and heavy), bitumen, natural gas liquids (NGLs), condensate and pentanes+, and natural gas.
The oil sands (i.e., bitumen) have been the primary source of oil production growth in Alberta since 2008. Other major plays that have been attracting investment include the Montney and Duvernay, which are shale plays that use horizontal wells and hydraulic fracturing to liberate the gas and light oil, and the Clearwater, a heavy oil play located in northeastern Alberta, a large portion of which underlies the oil sands region.

Economic & Fiscal Impact

The oil & gas industry is the largest contributor to Alberta’s economy, accounting for roughly $88 billion of GDP in 2024, equivalent to 25% of the province’s total GDP.
In 2024, the oil & industry accounted for over 200,000 direct jobs, equating to 8% of Alberta’s total direct jobs. According to Natural Resources Canada’s Energy Fact Book 2024-2025, there were roughly 1.5 indirect jobs for every direct job in the oil & gas industry in 2023 . Using this metric implies there were approximately 500,000 jobs (direct & indirect) related to Alberta’s oil & gas industry in 2024.
Cumulatively, over $315 billion in royalties has been paid by the oil & gas industry in Alberta since 1974.

B.C. Oil & Gas Industry Overview

B.C. Oil & Gas Production

In 2024, B.C.’s total oil & gas production averaged approximately 1.4 MMBOE/d, equivalent to 16% of Canada’s total production on a barrels of oil equivalent (BOE) basis. Natural gas represents the largest source of B.C.’s total hydrocarbon production. In 2024, it equated to over 80% of total volumes (1.2 MMBOE/d, or 7 Bcf/d).
Hydrocarbon production in B.C. is mainly comprised of natural gas, predominantly from the Montney in northeastern B.C. The province is the second largest producer of natural gas in Canada, behind Alberta. The natural gas liquids (NGLs), condensates & pentanes plus that are produced in B.C. are byproducts of its natural gas production.

Major Oil & Gas Plays in B.C.

The Montney is the primary source of B.C. hydrocarbon production. It is a prolific, liquids-rich unconventional resource play spanning roughly 130,000 km2 across Alberta and B.C. Depending on the location within the formation, it produces a range of hydrocarbon types (i.e., natural gas, NGLs, and condensate & pentanes plus).
Given the Montney’s potential and proximity to coastal B.C., it will be the primary source of supply for western Canadian LNG exports. Based on the latest reserve estimates from the B.C. Energy Regulato, there are roughly 86.26 Tcf of remaining raw natural gas reserves in the B.C. Montney. This implies over 35 years of Montney supply based on 2023 average production of 6.6 Bcf/d. Of note, reserves represent the resources that have been drilled and are commercially recoverable and represent only a fraction of the total resource potentially available to be drilled in the future. The total resource is an estimate of the total quantity contained in subsurface accumulations. B.C. has an estimated 532 Tcf of total marketable resource and 3,337 Tcf of total gas in place.
In June 2025, LNG Canada (Phase 1) reached commercial operation, marking Canada’s entrance into the global LNG market.

Economic & Fiscal Impact

Since 2016, the oil & gas industry has become a larger contributor to B.C.’s economy, accounting for roughly $14 billion of GDP in 2024, equivalent to 4% of the province’s total GDP, and 20% of GDP from all goods-producing industries. The increase in GDP over this period is attributable to LNG development (i.e., engineering and construction) and the associated increase in natural gas production.
In a similar trend to GDP, from 2016 to 2024, the oil & gas industry has been creating more direct jobs in B.C. In 2024, the oil & industry accounted for roughly 68,000 direct jobs, equating to 2.3% of the province’s total jobs. These are some of the highest-paying jobs in the province. For instance, the average compensation per job in the oil & gas extraction sub-industry in B.C. in 2024 was $189,000, compared to the provincial average of $ 77,000 across all industries.
The B.C. government collects royalties on oil & gas resources that are owned by the Crown and levies a tax on freehold production. Cumulatively, over $24 billion in royalties has been paid by the oil & gas industry in B.C. since 1950.

Saskatchewan Oil & Gas Industry Overview

Saskatchewan Oil & Gas Production

In 2024, Saskatchewan’s total oil & gas production averaged approximately 0.5 MMBOE/d, accounting for 6% of Canada’s total production on a barrel of oil equivalent (BOE) basis. Conventional oil is the dominant contributor, representing about 90% of the province’s total hydrocarbon production (or 0.45 MMBOE/d).
From 1950 to 2024, total hydrocarbon production in Saskatchewan has grown by 7% per year, on average.

Major Oil & Gas Plays in Saskatchewan

Hydrocarbon production in Saskatchewan is mainly comprised of conventional oil (i.e., light, medium, and heavy oil). There is very little natural gas production in Saskatchewan.
The largest oil plays in Saskatchewan are geographically dispersed. In southeast Saskatchewan, light and medium oil is produced from the Bakken and Torquay formations. In southwest Saskatchewan, light and medium oil is produced from the Shaunavon and Viking formations.
An increasing amount of heavy oil is being produced from the Mannville Oil play in the western Saskatchewan. Steam-assisted gravity drainage (SAGD) is being used in the Lloydminster area to extract heavy oil.

Economic & Fiscal Impact

The oil & gas industry is a major contributor to Saskatchewan’s economy, accounting for $11 billion of GDP in 2024, equivalent to nearly 13% of the province’s total GDP.
In 2024, the oil & gas industry accounted for over 16,000 direct jobs, equating to 3% of Saskatchewan’s total direct jobs. According to Natural Resources Canada’s Energy Fact Book 2024-2025, there were 1.5 indirect jobs for every direct job in the oil & gas industry in 2023. This metric implies there were about 40,000 jobs (direct & indirect) in Saskatchewan’s oil & gas industry in 2024.
Cumulatively, $45 billion in royalties has been paid by the oil & gas industry in Saskatchewan since 1950.

Summary of Canadian Consumption of Domestically Produced Crude Oil and Natural Gas

Canada consumes a mix of domestic production and imports for both crude oil and natural gas, with the U.S. being the dominant foreign supplier. Canada and the U.S. are highly integrated with supply delivered through a complex pipeline network that intertwines both countries.

Crude Oil Consumption Highlights

In 2024, approximately 1.29 MMB/d of Canadian refinery crude oil receipts were domestically sourced, equating to 74% of total refinery receipts.
Canada’s reliance on crude oil imports to meet refinery needs has declined by roughly 50% to ~0.46 MMB/d in 2024 since peaking at ~0.93 MMB/d in 2004. This is primarily a function of the closures of import-dependent refineries in Eastern Canada, but also due to pipeline changes that have improved connectivity to domestic sources.
Canada’s refining complex is predominantly designed to process lighter-grade crude oils. Consequently, Canada’s heavy oil and bitumen barrels are mostly exported to complex coking refineries in the U.S.

Natural Gas Consumption Highlights

According to the latest Statistics Canada data, in 2023, Canadian natural gas demand was ~13 Bcf/d. Net of natural gas imports, the implied consumption of domestically produced natural gas was 10.2 Bcf/d or ~78% of total demand.
The industrial sector is Canada’s largest natural gas consumer, accounting for ~7 Bcf/d or 53% of total demand in 2023.
Provinces in Western Canada meet demand needs with domestic production. However, changes in North American supply/demand dynamics have led to an increased reliance on U.S. natural gas imports for Eastern Canada and a loss in market share for Canadian gas producers in this region.

Summary of Crude Oil Market Fundamentals

Global Crude Oil and Liquids Supply

Based on the latest short-term forecast (at the time of this publication) from the U.S. Energy Information Administration (EIA), global crude oil and liquids supply is expected to average 107.2 MMB/d in 2026, up 1.3 MMB/d (+1.2%) from 2025. Supply growth is expected to be largely driven by OPEC+.

Global Crude Oil and Liquids Demand

Based on the average of the October 2025 short-term outlooks from the EIA and OPEC, global crude oil and liquids demand is expected to average 104.5 MMB/d in 2025, up 1.2 MMB/d Y/Y (+1.1%). For 2026, the EIA and OPEC are forecasting annual crude oil and liquids demand of 105.1 MMB/d and 106.5 MMB/d, respectively.

Global Crude Oil and Liquids Supply/Demand Balance

Based on the October 2025 EIA Short-Term Energy Outlook, global oil inventories are expected to increase in Q4/2025 and into 2026 due to OPEC+ plans to restore voluntary supply cuts, strong production growth from non-OPEC countries and weakening demand relative to the peak in summer. Increasing inventory levels could cause downward pressure on prices.
Crude oil prices have weakened in 2025, largely driven by concerns of slowing demand driven by an escalating global trade war and OPEC+ restoring voluntary supply cuts. Based on the futures market, the average price for WTI in 2026 is roughly US$61/B, down from the 2024 average of US$76/B.

WCSB Supply and Egress

The amount of egress capacity out of the Western Canada Sedimentary Basin (WCSB) influences Canadian crude oil prices. The Trans Mountain Expansion Project (TMEP) reached commercial operation in May 2024, adding 590 MB/d of pipeline export capacity, which has had a positive impact on Canadian crude oil differentials.

Summary of the Economic Impact of Canadian Oil and Gas

Conditions for the Canadian upstream oil and gas industry have been challenging since the 2014/2015 downturn; however, the situation has drastically improved post-COVID with the commodity price recovery and improved pipeline takeaway capacity, which have resulted in record-high revenue levels in 2022 and 2023.
Annual revenue for 2025 is currently estimated lower at $164.0 billion (relative to 2024) due to weaker oil and gas prices.
Capital expenditures (CAPEX) are expected to be up slightly compared to 2024, with the equivalent of approximately 60% of industry revenue, or $99.2 billion, estimated to be spent on operating expenditures (OPEX) and CAPEX combined, mostly spent in Canada.
The industry’s improved health has transferred to the bottom line of provincial governments. The industry paid a record $34 billion in oil and gas royalties to provincial governments in 2022. In 2024 and 2025, over $20 billion is expected in each year.
Over the past few years, cost inflation has erased some of the industry’s previous gains in reducing operating costs. Managing these costs continues to be an area of focus.
The economic impact of Canada’s upstream oil and gas sector is significant. In 2024, the sector comprised over 3% of Canada’s total GDP. The Oil and Gas Extraction sub-industry is the largest goods-producing industry in Canada. It is 31% bigger than the next largest sub-industry—Engineering and Other Construction Activities—and 36% bigger than the Residential Building Construction industry.
Based on direct and indirect jobs, the oil and gas sector employs about 450,000 people in Canada. When induced jobs are also considered, the oil and gas sector employs closer to 900,000 people in Canada. These are well-paying jobs; the average direct oil and gas worker’s total compensation is roughly 2× higher than the Canadian average for goods-producing industries.

Summary of the Case for Canadian LNG

Canada in a Global Context

Liquefied natural gas (LNG) is natural gas that has been converted into liquid form for ease of storage and transport, as LNG occupies roughly 1/600th the volume of natural gas. Most global LNG is exported from countries with large natural gas reserves (U.S., Australia, Qatar, Malaysia, etc.) to countries with limited domestic resources (China, Japan, South Korea, India, etc.).
In 2010, the National Energy Board (now Canada Energy Regulator) started receiving applications for long-term licenses to export Canadian natural gas as LNG to non-U.S. markets. Fifteen years later, LNG Canada Phase 1 reached commercial operation in June 2025 and will export ~1.9 Bcf/d once fully ramped. The start-up marks Canada’s entrance into the global LNG market, the project is the largest private investment in Canadian history. Over this same period, Canada’s largest trade partner and energy sector competitor, the U.S., has grown its LNG export capacity from nil to over 17 Bcf/d.

Canada’s Competitive Advantage

Canadian LNG shipped out of coastal B.C. destined for Asia has significantly shorter shipping distances than American supply from the U.S. Gulf Coast. In addition to shorter relative shipping distances, Canadian LNG has no chokepoints on shipping routes to key markets in Asia, where U.S. Gulf Coast supply must transit the Panama Canal.
Based on estimates from the Canada Energy Regulator, there is 1,105 Tcf of remaining marketable natural gas resources in the Western Canada Sedimentary Basin (WCSB). Using an average annual WCSB natural gas production of ~18 Bcf/d in 2023, this is equivalent to over 160 years of supply.
Based on 2024 data from Rystad Energy, Canadian LNG projects are expected to be among the most cost-competitive for delivery to Asia. Compared to competing sources, Canadian LNG benefits from lower liquefaction costs due to relatively lower ambient temperatures in B.C. and lower shipping costs due to shorter distances.
A 2020 study from the Conference Board of Canada found that an investment scenario in which Canadian LNG export capacity increased to 56 Mtpa (7.4 Bcf/d) would yield a $11 billion increase in GDP per year, ~100,000 more jobs, and over $2 billion per year of additional taxes and royalties.

Global LNG Trade – Where Will Canada Fit in the Mix?

According to the International Group of Liquefied Natural Gas Importers (GIIGNL) 2025 Annual Report, global LNG trade hit a record-high of 53.2 Bcf/d (406 Mtpa) in 2024, up over 80% relative to 2010 levels. Since 2010, the annual average growth rate has been roughly 4%.
Despite ranking as the world’s fifth largest natural gas producer in 2024, Canada remained on the sidelines in the global LNG trade. With vast natural gas reserves and direct tidewater access from BC, Canada is ideally suited to supply LNG to growing Asian markets.
As Canada becomes an LNG exporter in 2025-2028, it will immediately become a major player in the global LNG trade but will still be exceeded by the U.S., Australia, Qatar, Russia, and Malaysia.

Indigenous Partnerships

Indigenous communities are leading the way in LNG development in Canada, making a significant impact through strategic partnerships, ownership stakes, and business agreements.
For Indigenous communities, Canadian LNG creates jobs, supports Indigenous-owned businesses, and generates own-source revenues that can be used to invest in infrastructure to ensure that communities have clean drinking water, housing, and economic development.

Technological Advancements

In Canada, Woodfibre LNG, Cedar LNG, and Ksi Lisims LNG (proposed) will electrify their compression turbines using hydroelectricity. These will be some of the first LNG export facilities in the world with this design. Similarly, LNG Canada will rely on hydroelectricity to power many of its operations but will use efficient natural gas turbines for compression in the liquefaction process.

Summary of Canadian Oil and Gas Production

Canada is a significant supplier of oil and gas. Canada is the fourth-largest producer of oil in the world and the fifth-largest producer of natural gas.

Natural Gas Highlights

Competition from U.S. shale gas starting in 2008 led to a decline in Canadian production. In 2012-13, the trend reversed with the discovery of shale gas in BC and Alberta. Canadian production has now recovered to an annual record high of 19.0 Bcf/d (YTD average in 2025 from Jan.-Jun.).

Shale gas has also shifted the dominant location for natural gas production; from southern Alberta to northeast BC and northern Alberta.

Crude Oil Highlights

As of 2025 YTD*, Canadian oil production includes oil sands at 3.4 MMB/d (57%), conventional (excluding offshore) at 1.0 MMB/d (17%), east coast offshore at 0.2 MMB/d (4%), NGLs at 0.7 MMB/d (12%), and condensates & pentanes plus at 0.5 MMB/d (9%). Condensate and pentanes plus production has doubled since 2014. The growth of light liquids is a byproduct of the prolific shale gas and oil wells.

Since 2005, oil sands production has tripled, but after 2018, production growth has moderated.

(*2025 is YTD average from Jan-Mar)

Summary of Canadian Oil and Gas Export Infrastructure

Canada is both a significant consumer and supplier of energy. Substantial energy infrastructure has been developed over decades to gather, process, and ship energy to domestic and export markets.

Crude Oil and Natural Gas Liquids Infrastructure Highlights

There are more than 840,000 km of transmission, gathering, and distribution pipelines in Canada. The pipeline network delivers natural gas, natural gas liquids, and crude oil for domestic use and export.
Since 2007, Canada has more than doubled its pipeline and rail flows out of the Western Canada Sedimentary Basin (WCSB) to approximately 5 MMB/d (from ~2 MMB/d) to accommodate oil sands growth, however, growth has ultimately been constrained due to limited egress capacity, including the cancellation of three major proposed pipeline projects.
The Trans Mountain Expansion Project (TMEP), now complete, has added ~590 MB/d of egress capacity, marking a major milestone for Canadian oil producers and providing tidewater access to new markets.

Natural Gas Infrastructure Highlights

A large network of pipelines moves natural gas from producing regions in Western Canada to Eastern Canada and the U.S., where Canada represents the largest foreign supplier.
Starting in 2016/2017, constraints in regional gathering systems and export lines have limited growth and depressed prices, but recent capacity expansions have helped mitigate these issues. Canadian natural gas started to be exported from U.S. liquefied natural gas (LNG) terminals in 2023. LNG Canada, Canada’s first LNG export facility, successfully loaded its first cargo LNG in June 2025. This LNG export facility is supplied with its natural gas via the Coastal GasLink pipeline. Two other LNG export facilities (Woodfibre LNG and Cedar LNG) are currently under construction.

Summary of WCS – WTI Differential

A crude oil benchmark is a standard or reference price for a specific grade of crude oil. These benchmarks serve as a baseline for pricing, trading, and comparing other crude oil varieties.
Western Canadian Select (WCS) is the leading heavy oil benchmark in North America, produced exclusively in Western Canada. West Texas Intermediate (WTI) is a light, sweet crude oil benchmark and one of the primary global benchmarks, sourced from the United States.
Price differences among crude oil benchmarks are driven by two key factors: quality and geography.
WCS typically trades at a discount to WTI due to quality differences, high transportation costs, and limited direct tidewater access.
Pipeline capacity constraints in Western Canada have historically widened the WCS–WTI differential, sometimes exceeding US$20 per barrel.
Tidewater access through the Trans Mountain Expansion Project (TMEP), operational since May 2024, has narrowed the differential by about US$3 per barrel, resulting in an estimated $4 billion in additional industry revenue (based on June 2025 production).
Market access remains critical. Further investment in export infrastructure will help preserve these gains by keeping Canadian crude competitive in global markets.
Strategic infrastructure investment in one of the country’s largest industries will unlock production growth from the basin, driving gains to public finances and indirectly to GDP and employment. For context, in 2024, oil and gas extraction generated the highest GDP of any goods-producing sub-industry in Canada, totalling $74 billion, or 3.3% of the country’s overall GDP.