China Becomes Top Buyer of Canadian Oil via Trans Mountain Pipeline Amid Shifting Global Trade Dynamics

Ottawa, The Gulf Observer: China has emerged as the leading importer of Canadian crude oil shipped through the newly expanded Trans Mountain Pipeline (TMX), marking a significant shift in global oil trade flows and underscoring Canada’s ongoing efforts to diversify energy exports.

According to recent ship tracking data from Kpler, China has imported an average of 207,000 barrels per day (bpd) since the TMX expansion reached full operational capacity in June 2024 — a dramatic rise from the 7,000 bpd average in the previous decade. This volume surpasses the 173,000 bpd taken by the United States during the same period.

The shift comes amid strained Canada-U.S. relations, driven by U.S. President Donald Trump’s trade policies and protectionist rhetoric, which have included past threats to impose duties on Canadian crude and even talk of annexation. Although oil exports are currently exempt from tariffs, these tensions have prompted Canada to seek new, stable export destinations beyond its traditional southern neighbor.

Strategic Diversification

The C$34 billion TMX expansion, completed in May 2024, tripled capacity on the line from Alberta to British Columbia’s Pacific coast, enabling 890,000 bpd of crude to be shipped to tidewater and then on to overseas markets. Owned by the Canadian government, the pipeline now plays a critical role in connecting Canadian oil producers with Asian markets, including South Korea, Japan, India, Taiwan, and Brunei.

“Trump’s protectionist approach has made Canada a more appealing energy partner for China,” said Philippe Rheault of the China Institute at the University of Alberta. “Chinese refineries are also cautious about U.S. sanctions, especially concerning imports from Venezuela and Russia, and are looking to diversify.”

Indeed, China’s preference for Canadian crude also reflects its broader strategy to avoid overdependence on Russian oil, even as it continues to navigate Western-imposed sanctions on several energy-exporting nations.

Challenges and Capacity Outlook

Despite its growing strategic importance, the TMX pipeline has faced financial pressures. The system was only 77% utilized on average in 2024 — below the projected 83% — due in part to high tolls implemented to recover cost overruns during the project’s construction phase. However, utilization is expected to increase to 84% in 2025 and 92% by 2027.

Trans Mountain Corp. has announced that it is considering further expansion projects, potentially adding 200,000 to 300,000 bpd of new capacity. Analysts anticipate that most of the additional volumes will head toward Asian markets, with China remaining the likely primary destination.

“I think you’re going to see virtually all of those incremental vessels flow west,” said Skip York, chief energy strategist at Turner, Mason & Company.

Meanwhile, Canadian crude exports to countries outside the U.S. surged nearly 60% in 2024 to an annual record of approximately 183,000 bpd, according to Statistics Canada.

The Road Ahead

With mounting calls from Canadian politicians for additional export pipelines to diversify markets and reduce reliance on the U.S., momentum is building — albeit slowly — to create new energy corridors. However, regulatory and political hurdles continue to present obstacles.

As the global oil market continues to evolve in response to geopolitical shifts, Canada’s expanding relationship with Asian buyers — and China in particular — marks a pivotal development in the country’s energy strategy.