Canadian Oil Pushes Deeper Into U.S. Gulf Coast Market
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Canadian crude oil is deepening its penetration into the U.S. Gulf Coast market, driven by declining Mexican and uncertain Venezuelan supply, the Iran war disrupting Middle Eastern shipments, and the opening of Enbridge's Houston Oil Terminal (EHOT) in July 2026. Canada exported a record 4.3 million bpd of crude in 2025, with over 90% going to the U.S., and U.S. imports of Canadian crude averaged just over 4 million bpd in the first half of 2026. While the Midwest remains the largest market for Canadian barrels, taking 2.92 million bpd in early 2026, Gulf Coast imports fell to 337,000 bpd in the same period from 526,000 bpd in 2024. EHOT, designed to push more heavy crude into the Gulf Coast, has initial storage of 2.5 million barrels with plans to expand to 15 million barrels. Joe Calnan of the Canadian Global Affairs Institute noted that Gulf Coast refineries, built for heavy grades from Venezuela and Mexico, are a natural fit for Canadian barrels. Separately, the Trans Mountain expansion to the Pacific reached full capacity of 890,000 bpd in June 2026, with plans for an additional 90,000 bpd.
Source report
Alex Kimani Wed, September 9, 2026 at 4:00 PM PDT 4 min read
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For decades, the United States has been Canada's most important energy partner, absorbing the lion's share of its oil and gas production. After meeting its domestic refining needs, Canada exports approximately 80% of its crude output, with roughly 90% going to the U.S., thanks to integrated oil infrastructure built over more than 70 years.
In 2024, Canada exported crude oil, natural gas liquids (NGLs), and natural gas worth $160 billion, with Canadian oil accounting for more than 60% of U.S. crude imports. In 2025, Canada exported a record 4.3 million barrels per day (bpd) of crude, with 3.9 million bpd—just over 90%—going to the U.S., according to the Canada Energy Regulator. That trade has strengthened further this year: U.S. imports of Canadian crude averaged just over 4 million bpd during the first half of 2026, while total Canadian crude exports in June were 6.4% higher than a year earlier.
The latest round of U.S.-Canada tariffs has done little to loosen those ties in oil. Canadian heavy crude has become harder for U.S. Gulf Coast refiners to replace as:
- Mexican production declines
- Venezuelan supply rises but remains somewhat uncertain
- The Iran war complicates shipments of competing Middle Eastern grades
The surge in Permian production offers only a partial substitute, because much of it is lighter than the crude many Gulf Coast refineries were designed to process.
Enbridge's Houston Oil Terminal Expands Access
Enbridge's Houston Oil Terminal (EHOT), which began operations in July, gives Canada considerably more access to the Gulf Coast market. EHOT provides Canadian heavy crude with access to U.S. Gulf Coast refineries and export docks, opening another outlet for oil sands production as refiners look for heavy barrels outside the Middle East.
"The refinery cluster in the U.S. Gulf Coast boasts the greatest concentration of heavy, sour crude processing capacity anywhere in the world. Many of these facilities were designed to run heavy grades from Venezuela and Mexico, making them a natural fit for Canadian barrels."
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— Joe Calnan, VP of Energy, Canadian Global Affairs Institute
Market Breakdown
The Midwest remains by far the largest U.S. market for Canadian crude, taking an average of:
- 2.75 million bpd in 2025
- Roughly 2.92 million bpd during the first half of 2026
The Gulf Coast is a much smaller market for Canadian barrels, despite being the country's largest refining center and home to many complex refineries capable of processing heavy, sour crude. Canadian crude processed in PADD 3 averaged:
- 416,000 bpd in 2025
- Roughly 337,000 bpd during the first half of 2026 (based on EIA January–June data), down from 526,000 bpd in 2024
EHOT is designed to push more Canadian heavy crude into that market, with Enbridge planning to expand the terminal's storage capacity from 2.5 million barrels to 15 million barrels.
Expansion on the Pacific Route
Canada is also adding capacity on its Pacific route. The Trans Mountain expansion nearly tripled pipeline capacity to 890,000 bpd when it entered service in Q2, and the system hit full capacity for the first time in June. Trans Mountain now plans to add another 90,000 bpd of capacity.
Source
Yahoo FinanceWestern