Stephen Harper’s bet may pay off
China is set to embrace Canada’s offer of more crude, heating up competition with the United States as the world’s top two oil consumers jostle to secure supplies and meet ravenous demand.
Shipments from a politically stable country such as Canada will be a welcome diversification of supply sources as top consumers make plans to deal with a supply shock if tensions in the Middle East escalate and choke off Iranian exports, barely a year after markets coped with a disruption from Libya.
Canada’s plan to ship crude to Asia got a boost after Prime Minister Stephen Harper said his nation would step up efforts to supply the region after the United States delayed a decision on a pipeline supply link.
Canada’s oil sands output is expected to double by the end of this decade from 1.5 million barrels per day (bpd) now, according to IHS Cera, close to Libya’s exports before a civil war disrupted output this year.
China, eager to secure extra energy supplies to power its rapidly growing economy, is already buying more Canadian crude.