The energy sector will feel the impact of tariffs, increasing farmers’ costs ahead of spring planting. The U.S. put a 10 percent tariff on fuel imports from Canada. Patrick De Haan, head of petroleum analysis at GasBuddy, says consumers will feel the impact soon.
“That is going to start trickling down to the end-user in the weeks ahead. But there’s certainly a very different situation, depending on where you might live across the U.S.,” he said.
De Haan explains the Northeast generally receives refined products from a Canadian refinery, and those areas will see impacts faster.
“But in the Midwest, refineries generally process a heavy slate of Canadian crude oil due to how slowly that crude oil gets into the United States, and then it takes time to be refined,” he continues. “The impacts throughout areas of the Midwest, the Great Lakes, and the Rockies will probably see a much lower-level impact that is much more delayed than compared to what we expect in New England.”
Canada’s Role In U.S. Energy
De Haan says Americans may not know that Canada fills a lot of U.S. fuel needs.
“At 4.5 million barrels of oil per day, Canada is the largest source of crude oil imported in the United States, and a lot of what we use here in the Midwest has been fed by Canadian oil through U.S.-based refineries,” he explains. “So a good portion of what you may be farming with… as well as things like gasoline and jet fuel, is derived from that Canadian crude oil.
Some say the U.S. should use its own fuel supplies, but De Haan says that’s not realistic.
“The U.S. is not a major oil producer, and much of the oil that we were receiving inland was from Canada, so our systems have been built around that stable supply of Canadian oil that’s existed for the better part of five decades,” he says. “That is not something that can be easily replaced overnight.”
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