Canada Likely To Begin Selling Oil Overseas

Canada Likely To Begin Selling Oil Overseas

Canada plans to begin selling oil to countries other than the United States, and has already sent some test batches to countries like India and Italy. The only thing impeding this goal is Canada's poor access to Ocean ports. Currently, there are plans in place that would allow pipelines to run from Canadian oil fields and refineries to U.S. ports, but some – such as Keystone XL – have been halted over environmental and political concerns.

Canada has been exporting less and less oil to the U.S. since the oil shale boom, leaving Canada with a surplus of oil and looking for buyers.

The United States does not export crude oil overseas. It hasn't for over 40 years. Canada must use U.S. ports if it wants to ship oil overseas, which it can do if it obtains the necessary licenses. The embargo only applies to U.S.-produced crude oil, not necessarily all oil being shipped from U.S. ports.

Canada would also get more for its exports if it looked beyond the United States, approximately $50 million more per day. However, the country's shift toward overseas exports could potentially harm relations between Canada and the U.S. – the U.S. still gets a third of its oil from Canada.

The oil sands industry is huge, and believes its size and output justify more than one customer (namely, the U.S.). The major obstacle continues to be the country's access to ports. Canadian producers, such as TransCanada, have been vying for use of pipelines that haven't even been completed or approved yet – such as the Keystone XL.