Canadian Oil: The Importance And The Opportunity
Historically, this opportunity was only available to wholesale energy traders. As a result, the Canadian crude market is something that is not well understood. However, given this is the largest foreign supply to the U.S. (greater than Saudi Arabia), the reality is that its importance and influence is undeniable, and it represents an opportunity for a range of global investors.
Canadian Oil Facts
1. Canada is the largest foreign supplier of oil to the U.S. at more than 40% of all US imports. This is more than all OPEC producers combined and roughly three times what Saudi Arabia itself supplies. Almost all Canadian oil production goes to the US. See below:
- 75% of Americans think the majority of their oil imports are from the Middle East. Source: UT Energy Poll (utenergypoll.com)
2. Canada has the third-largest oil reserves in the world, only behind Venezuela and Saudi Arabia.
Source:Oil - Energy British Columbia
3. Canada ranks as the most socially progressive country of the top global oil producing nations. Think where you would vacation.
4. While Canada produces many types (grades) of crude, the "heavy sour" grade is the dominant grade. Most Canadian producers, which are some of the largest in the world, have heavy oil production linked to WCS.
Reasons for the discount
Given WTI is considered "light-sweet" and Canadian Crude is predominantly "heavy-sour," this is often the source of confusion that causes both controversy, misunderstanding and opportunity. As implied by the name, "hea....