Canada crude oil imports slump 20% in 2020 on Covid-19 impact

London, (Quantum Commodity Intelligence) - Canadian crude oil imports dropped 20% in 2020 as COVID-19 hit overall demand for refined products, while Newfoundland and Labrador's crude oil imports dropped by more than 70% also because of the idling of the Come by Chance Refinery in March 2020, said the Canada Energy Regulator Wednesday.

Imports came in at 555,000 barrels per day (b/d), down from 693,000 b/d in 2019, with an even greater proportion flowing from the neighbouring US who took 77% of market share, up from 72% the prior year.

Canada is the fourth-largest exporter of crude oil globally and the fifth-largest producer, but it imports around 40% of the raw material it needs for its refineries, with much of its crude oil production located in its western provinces while its demand centres are concentrated in the east.

It can also sometimes be cheaper to import crude with the required specifications, although generally, imports are more expensive when a refinery has access to local pipelines.

"Refineries in the main importing regions of Quebec and Atlantic Canada have been slower to recover from the pandemic impacts compared to refineries in the rest of Canada. As a result, there has been lower demand for imports throughout 2020. Quebec and Atlantic Canada have generally faced tighter COVID-19 travel restrictions than western provinces, impacting their local refinery demand," said the CER.

"Atlantic Canadian refineries were also more heavily impacted by the pandemic because more of their refined petroleum products are exported to other countries where global demand for these products remained weak. By contrast, western Canadian markets generally consume most of their refineries' products rather than export."