Canadian Oil Producers Likely Resilient To Potential Tariffs

U.S. President Donald Trump announced on Feb. 1, 2025, that his administration planned to impose a 10% tariff on Canadian energy imports effective Feb. 4, 2025. The president subsequently postponed these tariffs for 30 days pending ongoing negotiations with the Canadian government. If these tariffs take effect, we expect the financial effects of the tariff on both U.S. refiners and Canadian producers will be limited. Furthermore, many U.S. refineries are high-complexity that are specifically configured to run heavy crudes, which are not produced domestically. Accordingly, U.S. crude imports (with Canada being the largest source) are skewed toward heavy grades. U.S. refiners could shift crude slates to process lighter, sweeter, domestically produced crude, but we anticipate this would result in less

...- On Feb. 1, 2025, The U.S. President Donald Trump announced his intent to impose a 10% tariff on all Canadian energy imports. Originally set to take effect on Feb. 4, 2025, the president subsequently delayed imposing these tariffs until at least March 4 pending further negotiations. - Many U.S. refiners rely on Canadian crude oil imports as refining feedstock, and most Canadian oil and gas producers have limited alternate sale markets and lack sufficient domestic refining capacity. - Accordingly, we believe the financial burden of these tariffs will be shared by U.S. refiners (and ultimately U.S. consumers) and Canadian producers. - However, a relatively weak Canadian dollar will limit top-line effects for Canadian producers, and the industry's overall low leverage will further support credit metric resilience and ratings. U.S. President Donald Trump announced on Feb. 1, 2025, that his administration planned to impose a 10% tariff on Canadian energy imports effective Feb. 4, 2025. The...

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