Oil terminal in British Columbia

USD/CAD

Key zone: 1.4160 - 1.4250

Buy: 1.4300 (on a pullback after retesting 1.4250) ; target 1.4450; StopLoss 1.4230

Sell: 1.4100 (on a confirmed break of 1.4150) ; target 1.3950; StopLoss 1.4170

Canada plans to build a new oil pipeline to reduce its dependence on the United States. The new route will be capable of supplying up to 1 million barrels of oil per day to Asian markets.

Reminder:

Following the launch of the Trans Mountain Expansion pipeline in May 2024, which cost CAD 34 billion and was completed after ten years of delays, Canadian oil exports reached record levels. However, oil and gas companies continue to criticize the federal government, arguing that environmental regulations and the tax system are too restrictive and discourage investment.

Speaking in Calgary last week, Prime Minister Mark Carney announced that the government of Alberta had already submitted to the Major Projects Office a proposal to build a pipeline more than 1,000 kilometers long to the western coast of British Columbia. Construction is scheduled to begin in September 2027. Carney intends to turn Canada into an "energy superpower" and reduce the country's dependence on the U.S. market.

According to Carney, Canada now has a once-in-a-generation opportunity.

• The new pipeline is expected to run parallel to the existing Trans Mountain corridor and connect Alberta's oil fields with Canada's Pacific coast.
• The project will be carried out by the state-owned Trans Mountain Corp in partnership with Pembina Pipeline Corp. The new pipeline is expected to become Canada's "gateway to the world's fastest-growing markets."
• The government expects the project to strengthen trade ties with Asia and attract more than CAD 200 billion (approximately USD 141 billion) in new foreign direct investment.
• At the same time, Canada plans to more than triple its LNG exports over the next decade by building five new LNG terminals and investing another CAD 10 billion in the modernization of the Port of Vancouver.
• Alberta Premier Danielle Smith expects to double the province's oil production and complete construction of the pipeline by 2035.

For the global oil market, the emergence of a new export route means stronger competition for Asian buyers. If the project is completed, the volume of North American crude reaching China, Japan, South Korea, and India will increase significantly. This will place greater pressure on Middle Eastern suppliers and could reshape traditional global trade flows.

What does this mean?

The U.S. President has threatened to impose 100% tariffs on Canadian goods, continues to insist that Canada should become the 51st U.S. state, and this week refused to approve a long-term extension of the USMCA trade agreement that he himself signed during his first presidential term in 2020.

The new pipeline has become part of Carney's strategy to reduce Canada's dependence on the United States.

Today, about 75% of all Canadian exports are shipped to the U.S. market. In the oil sector, the dependence is even greater: nearly all exported crude—around 4 million barrels per day—is sent to the United States, supplying approximately 60% of U.S. oil imports.

Carney has pledged to double Canada's trade with other countries amid growing pressure from Trump. The Canadian dollar's reaction to this news has so far been unstable, but the medium-term outlook remains positive.

So we act wisely and avoid unnecessary risks.

Profits to y’all!