⁠Asia Poised to Take 70% of Canadian Oil Exports as Trans Mountain Expansion Cuts Reliance on U.S. Market

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For decades, Canada’s oil trade had a familiar destination: south. The Trans Mountain Expansion is changing that map. At the APPEC conference in Singapore on Sept. 8, Trans Mountain chief executive Mark Maki said Asia, led by China, could account for 70% of Canadian crude exports as planned optimization lifts the pipeline’s capacity by roughly one-third by the end of 2028. The forecast captures how quickly Pacific-bound trade has grown since the expanded system opened in 2024, but it should not be confused with today’s national export mix. Statistics Canada reported that only 2.6 million of 20.7 million cubic metres of crude exported in June 2026 went to countries other than the United States. The shift, then, is not a sudden divorce from the U.S. market. It is the emergence of a credible second door for Canadian producers.

What the 70% Forecast Really Signals

The headline number is striking because it suggests a trade map that would have looked implausible only a few years ago. Maki told Reuters that roughly two-thirds of vessels already leaving Trans Mountain’s Westridge Marine Terminal head to Asia and that he expects most new barrels created by the company’s next capacity additions to follow the same route. China is expected to remain the largest buyer for those Pacific shipments.

That does not mean 70% of all Canadian crude exports are already moving to Asia. June data from Statistics Canada show non-U.S. exports represented only about 12.6% of national crude exports. The most useful way to read the forecast is as a statement about the direction of incremental Pacific trade. Trans Mountain has created a rapidly growing Asian outlet, but the United States still absorbs the overwhelming majority of Canada’s crude today, particularly through the continent’s deeply integrated pipeline network.

Trans Mountain Turned a Bottleneck Into a Pacific Gateway

The expanded Trans Mountain system entered commercial service on May 1, 2024, adding 590,000 barrels per day of capacity to the existing route between Alberta and Burnaby. Total nominal capacity rose from about 300,000 barrels per day to roughly 890,000, giving western Canadian producers meaningful access to waterborne markets rather than forcing nearly every marginal barrel toward U.S. pipeline systems.

That physical change matters more than the map alone. Before the expansion, Canadian producers regularly faced periods when output growth pressed against export capacity, leaving barrels effectively trapped in an oversupplied regional market. By opening a much larger marine outlet, Trans Mountain added competition for Canadian crude. The pipeline reached full capacity for the first time in June 2026, according to Maki, showing how quickly producers and buyers have absorbed what initially looked like ample spare room.

China Has Become the Anchor Customer

China is already the central force behind Trans Mountain’s Asian trade. S&P Global reported that 374 Aframax cargoes from the Westridge terminal went to China between May 2024 and July 2026, far more than any other Asian destination. That concentration explains why Maki expects China, the world’s largest crude importer, to remain Canada’s single biggest customer on the Pacific side of the trade.

Demand is not just broad market interest; individual refiners are buying substantial volumes. S&P Global estimated that Zhejiang Petroleum & Chemical purchased about 178,000 barrels per day of Canadian crude during the first eight months of 2026, up roughly 36% from its 2025 average. Canadian heavy grades can fit complex refining and petrochemical systems designed to process heavier, higher-sulphur feedstocks. For Alberta producers, every recurring Chinese buyer makes Pacific access less theoretical and increasingly resembles a durable commercial market.

South Korea, Japan and India Are Broadening the Buyer Base

China may dominate the cargo count, but the strategic value of Trans Mountain increases as more countries participate. S&P Global counted 33 Westridge cargoes to South Korea, four to India and three to Japan between the expansion’s May 2024 start and July 2026. Reuters also reported that Maki expects purchases from India, Japan, South Korea and Vietnam to rise, while Thailand could emerge as another customer.

South Korea offers the clearest example of how quickly that diversification can scale. S&P Global reported that the country aims to import as much as 16 million barrels of Canadian crude in 2026, more than three times the 4.88 million barrels received in 2025, with the possibility of eventually reaching 20 million barrels annually. Japan’s ENEOS also received a Canadian cargo exceeding half a million barrels in August, showing that Canadian crude is entering procurement systems well beyond China.

The U.S. Market Is Still Far From Being Replaced

The diversification story is real, but the national numbers remain heavily tilted toward the United States. Statistics Canada reported 20.7 million cubic metres of crude exports in June 2026. Of that total, 2.6 million cubic metres went to countries other than the U.S., leaving roughly 18.1 million cubic metres, or about 87%, tied to the American market during the month.

That dependence reflects decades of integrated infrastructure, refinery configuration and geography. Major Canadian export pipelines still run south, and U.S. Midwest and Gulf Coast refineries are important buyers of heavy Canadian crude. Trans Mountain does not erase those relationships; it changes the bargaining environment around them. Producers now have a meaningful alternative for a portion of their barrels, especially when Asian prices, refinery demand or geopolitical conditions make Pacific shipments more attractive. Diversification is therefore better understood as additional leverage than outright substitution.

More Market Access Can Strengthen Canadian Pricing

One of the most important consequences of extra pipeline space is its effect on the discount Canadian heavy crude receives relative to U.S. benchmarks. The Canada Energy Regulator has long noted that insufficient transportation capacity can oversupply local markets and force Canadian producers to accept weaker prices. When pipeline capacity is adequate, competition among routes and destinations improves the ability to capture stronger netbacks.

That mechanism became visible after the Trans Mountain Expansion entered service. S&P Global said the new line added a cushion of export capacity and helped stabilize western Canadian crude pricing, while other industry analysis has linked expanded tidewater access with a narrower WCS-WTI discount. Quality differences mean Western Canadian Select will normally trade below lighter crude such as WTI. What Trans Mountain can reduce is the portion of that discount caused by congestion, transportation scarcity and too few competing buyers for the marginal Canadian barrel.

The Pipeline Is Filling Faster Than Expected

The next challenge is that the newly created breathing room is disappearing. Trans Mountain said in July that its system had been running at or near full capacity for months. Its response is an optimization program designed to add as much as 300,000 barrels per day by the end of 2028, largely by improving existing infrastructure rather than constructing another full-length pipeline from Alberta to the coast.

The first step is expected to add about 90,000 barrels per day, or roughly 10% of current nominal capacity. A further 210,000 barrels per day is planned by the end of 2028. If both phases proceed as envisioned, system capacity would rise to around 1.19 million barrels per day. Maki’s expectation is that most of those incremental barrels will head toward Asia. That is why the 70% forecast is tied as much to future pipeline capacity as to present tanker destinations.

Record Production Keeps Raising the Stakes

Canada’s crude sector is not standing still while new export capacity is added. Statistics Canada reported production of 25.6 million cubic metres of crude oil and equivalent products in June 2026, up 3.1% from a year earlier and marking a 13th consecutive month of year-over-year growth. Exports rose even faster, increasing 6.4% to 20.7 million cubic metres during the month.

That growth helps explain why Trans Mountain reached full capacity so soon. Reuters reported that Canadian oil production, already the fourth-largest in the world, is expected to exceed the previous year’s record of 5.3 million barrels per day in 2026. More production can refill pipeline capacity almost as quickly as operators expand it. For producers, the question is no longer whether Pacific access matters, but whether new egress can be added quickly enough to prevent transportation constraints from tightening again as output keeps climbing.

Middle East Disruptions Are Making Canadian Barrels More Valuable

Asia’s interest in Canada has accelerated because energy security has become more complicated. Reuters reported that disruptions associated with the war involving the U.S., Israel and Iran have affected traditional Middle Eastern supply flows, increasing Asian refiners’ interest in alternative crude sources. At APPEC, refinery and logistics participants from Japan, Thailand and South Korea told S&P Global that Persian Gulf disruptions had increased the urgency of finding dependable heavy, sour crude.

Canada fits that need unusually well. Oil-sands production is large, long-lived and located in a politically stable producer, while Trans Mountain gives those barrels direct Pacific access. Canadian crude still faces a long ocean voyage and significant freight costs, so it will not win every purchasing decision. But when refiners are worried about chokepoints, sanctions or disrupted Gulf cargoes, diversity itself has value. Reliability can become part of the commercial calculation alongside price and quality.

Diversification Changes the Relationship, Not the Geography

Trans Mountain is reducing Canada’s dependence on a single customer without making the U.S. market irrelevant. The June 2026 trade data make that clear: nearly seven-eighths of Canadian crude exports still went south. What has changed is that a growing share of western production can now reach China and other Asian refiners from a Canadian port, giving exporters options that were once severely limited.

That creates a more balanced negotiating position for producers and a more resilient national export system. If Trans Mountain’s planned 300,000-barrel-per-day optimization is completed and Asian demand continues to absorb most of the additional capacity, Pacific trade will become a larger structural part of Canada’s oil economy. The 70% forecast should therefore be read as a signal of where new Trans Mountain-connected barrels may go—not as evidence that Canada has already replaced the United States with Asia.

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