Canada is experiencing a massive spike in gas prices related to Russia’s invasion of Ukraine, despite Canada’s low oil imports from Moscow.
Canada has the third largest oil reserves in the world and depends on Canadian companies to refine its crude. But with Canadians consuming tens of billions of liters of oil each year, Canada also imports crude from other countries to meet demand.
More than 77% of Canada’s total crude oil imports in 2020 will come from the United States. In 2020, Canada did not import any crude oil from the Russian Federation and imported 3% of total crude oil from Russia in 2019.
Even so, on Monday, Prime Minister Justin Trudeau announced a ban on Russian crude oil imports in a symbolic gesture. For now, Russia’s oil ban applies only to crude oil, but the government is looking at oil derivatives further, a government source told The Canadian Press.
Russia has vast natural resources including oil and gas, but some foreign buyers are afraid to buy any products for fear of entanglement with financial sanctions.
“Commodities have been rejected by European refiners in the market, because people are afraid of possible sanctions, and so they are,” said Amy Myers Jaffe, a research professor. don’t want to be caught with some goods they can’t resell,” said Amy Myers Jaffe, a research professor. and executive director of the Climate Policy Laboratory at Tufts University, told The Associated Press.
With Moscow’s products out of the international market, the already small global oil supply is getting smaller, meaning Canada is now competing for oil in an increasingly competitive market.
“We’re emerging from COVID with pent-up demand likely to exacerbate that situation,” Canada’s Dan McTeague President for Affordable Energy told CTV News on Wednesday. “Then Vladimir Putin used Europe’s vulnerability and the fact that they demanded his oil and gas… the price of energy has now become a global concern. “
Industry Minister François-Philippe Champagne told reporters on Parliament Hill on Wednesday that he had asked the Competition Bureau to monitor gas prices, noting that he had spoken to companies about promoting domestically produced to combat any possible shortage.
Canadians aren’t the only ones feeling the pinch as gas prices continue to climb. Russia supplies about 40% of the European Union’s natural gas, raising costs across the bloc.
In addition to Canada, OPEC is also planning to gradually increase oil production to make up for the global shortfall, which started before Russia invaded Ukraine because of the already short supply of oil. However, OPEC has only increased production moderately, which will likely prolong oil and gas prices higher.
Featuring files from Nicole Bogart, The Canadian Press and The Associated Press.
