China is increasing its purchases of %CrudeOil from Canada amid ongoing trade tensions with the United States.
Data shows that crude oil exports from Canada’s West Coast rose significantly in August, driven in large part by increased shipments to China.
Canada exported 13.7 million barrels of crude from its West Coast terminals in British Columbia during August, up from 13.1 million barrels in July and 12.4 million barrels in June.
Of the August exports, 6.8 million barrels were sent to China, outpacing the 5.2 million barrels that were shipped to the U.S. in August.
Canada’s oil exports have risen sharply since May of this year, when they totaled just 1.7 million barrels, after the Trans Mountain crude oil pipeline, or TMX, was expanded and came online.
TMX has added 590,000 barrels per day of new capacity to the 300,000 barrel a day pipeline, shipping both heavy and light crude oil out of British Columbia terminals.
The rise in shipments is good news for leading Canadian oil producers such as %SuncorEnergy (NYSE: $SU), %ImperialOil (NYSE: $IMO), and %CanadianNaturalResources (NYSE: $CNQ).
Analysts say that China views Canadian crude oil as a reliable supply source amid escalating trade tensions with the U.S. over President Donald Trump’s tariff regime.
Also, shipping times from Canada’s West Coast to China are 10 days less compared with the U.S. Gulf Coast, note analysts.
For Canada, the increased crude oil shipments to China are welcome as America’s northern neighbour grapples with President Trump’s tariffs and political tensions.
However, China is buying more crude oil from Canada at a time when the two countries have their own trade issues to resolve.
China recently slapped a 75% import duty on canola crops and related products from Canada after the Canadian government slapped a 100% tariff on Chinese electric vehicles.
Canadian government officials in Ottawa recently said they are reviewing and reconsidering the tariff on Chinese electric vehicles and may scrap the import duty altogether.
Suncor Energy’s stock is up 16% this year and trading at $41.69 U.S. per share in New York.
