Refiner Marathon Dumped Canadian Crude In Q4 Report; Even w/o Tarrif Bullshit, Canadian Tar Sands Producers Are Cooked

[hatrack]

“There is no honor among thieves” is a truism that apparently also applies to oil companies. In an Q4 earnings call to shareholders, U.S. refinery giant Marathon Petroleum Company unequivocally told investors they plan to abandon their long-time Alberta oil patch suppliers now that President Donald Trump has implemented 10 percent tariffs on Canadian energy imports. “We could look to pivot to alternative crudes because of our logistics capabilities,” Rick Hessling, chief commercial officer at Marathon assured investors asking about the company’s tariff exposure to Canadian heavy oil. “I would give you crudes to think of such as Bakken, Rockies, Utica, Marcellus as a few…We do believe the producer will bear a large part of the impact. So I would say a light switch within our system we believe would have minimal impact.”

These few words portend a devastating blow to Canadian oil exporters now that the shoe has finally dropped on long-threatened U.S. tariffs. The Trump administration imposed 25 percent tariffs on all non-energy goods from Canada and Mexico Tuesday, sending stock prices tumbling. On Wednesday the U.S. announced a one-month exemption for the auto industry only, leaving the 10 percent energy levy in place.

Our country (Ed. - Canada) produces about 5 million barrels of crude per day, 80 percent of which is delivered to refineries in the U.S. Marathon is the biggest American processor, handling over 2.5 million barrels per day. Almost half of Marathon’s capacity is located in the U.S. Midwest, which is the largest U.S. export region for Canadian crude. Marathon CEO Maryann Mannen further flagged for investors that her company would isolate the financial pain of Trump tariffs onto suppliers and consumers. “We believe that the majority of that will ultimately be borne by the producer and…to a lesser extent, the consumer. We, MPC, will use…our operational performance to really minimize…the margin impact to our financial results.” Other U.S. refining companies like PBF Energy have less ability to switch to a lighter crude feedstock but assured their investors that Alberta producers would have to take whatever price they were offered after a 10 percent tariff. “If they don’t sell it to the U.S., it’s going to stay in the ground,” PBF CEO Mathew Lucey stated bluntly on their Q4 earnings call.

The biggest U.S. buyers of oil sands crude have revealed how quickly the Albertan economy will be thrown under the bus if their short-term profitability pointed elsewhere. This truth bomb lays waste to a cherished narrative within the Alberta oil patch that their global market position is secure for decades into the future. Premier Danielle Smith has regularly boasted there is room to double provincial production. Extremist elements within her political base — fueled by years of political rage-baiting towards Ottawa — have also mused that Alberta would be better treated if they abandoned Canada for the embrace of our American neighbours. These sedition-adjacent conceits now lie in smoldering ruin.

EDIT

https://www.desmog.com/2025/03/05/tariffs-likely-to-crater-canadian-crude-exports-to-the-us-marathon-tells-investors/

[dutch777]

1. For different reasons, wasn't Canada looking to ship oil to its west coast ports for export years ago?

I think it had to do with pipeline projects that got killed in the US. I suppose given Russia's deep discounting of its oil prices to China and India, Canadian oil at market rates and requiring shipping may not be competitive.