Canadian oil and its impact on the global market

Canadian oil and its impact on the global market

- in Releases
53
Comments Off on Canadian oil and its impact on the global market

Shatha Khalil
Canada is Located in the north of North America and extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, heading north to the North Arctic Ocean and consists of 10 districts and three counties.
Oil in Canada
The discovery of oil in Canada dates back to thousands of years. Charles Nilsson was the first Canadian to extract oil for commerce in 1851 in the town of Enniskillen, near Sarnia, Ontario now ( it was called Western Canada) The work was started in areas near Black Creek, where the first oil company was established in Canada.

Canada’s oil industry grew in parallel with its southern neighbor, the United States of America, but developed in Canada at rapid rates because of its unique geographical and geological nature, and its uniqueness in resources and settlement patterns, and the development of the oil sector was a major factor in Canada’s history as it became distinct from its neighbor in the south , .

The traditional oil and gas industry in Western Canada is characterized by maturity, although the resources of the Arctic and offshore oil resources are still in the stages of exploration and initial development and development compared to other countries ,
and in the late 1950s of the twentieth century , Canada became a giant in natural gas production and second only to Russia in terms of exports. It is also home to the largest natural gas extraction facilities as Pipeline networks were established in the same period, reflecting on the development of local International markets in a huge, large and fast way.

The importance of Canadian oil in the world oil markets has become apparent since 2003, as Canada’s oil name has become influential in the world and the third largest country after Venezuela and Saudi Arabia with a proven reserve of oil and its oil reserves rising from 10 billion barrels per  to 180 billion barrels. (18 times), the world’s fifth-largest country (after the Saudi kingdom, Russia, America and China), an oil producer.

Although Canada is a developed country , however , its oil consumption is relatively low , the annual consumption grow about 0.7%, and the Canada ‘s oil consumption in 1980 was about 1.87 million barrels, and in 2016, about 2.40 million barrels, an increase of 530 thousand barrels only over 36 years.

Canada’s income sources are diverse, so it is considered among rich countries and its income from oil is a secondary source. This indicates that the increase in Canada’s oil production is exported to the world markets and therefore Canada’s oil will be a strong competitor to the oil of countries whose income and general budget depend on the export of oil as a source of income , which is significantly affected by the oil market and price volatility, which is directly reflected on the deficit of the general budget of those countries and thus affect the level of living, health and service of citizens in those countries, and most importantly to maintain the low costs of extracting oil.

Investments in Canada are estimated in billions of dollars, but the bitumen, which is a mixture of organic liquids with very high viscosity, consists of an intensive mix of polycyclic aromatic hydrocarbons used in all kinds of moisture insulation and road construction and it is existed in the oil sands of Athabasca, and is still a resource that has not been fully exploited.
Economists and analysts believe that by 2025, Canada could be at the top of the list of oil exporting and producing countries, and other non-conventional oil resources – the resources of the northern and maritime borders and heavy crude oil in the West.
In an assessment conducted by Energy Information Administration (EIA) of global resources in 2004, Canadian oil reserves ranked second.

“Canadian Petroleum Strategy”
Canada has developed an important strategy for its economy. Canadian oil was able to replace the oil that was imported by America from other countries. Canada became the largest country to export oil to the USA where the USA’s imports from Canada reached 3.4 million barrels per day (37% of total imports) in 2014. Canada is seeking to expand its markets to export oil to reach Asia and other countries.

Economist Gerald Fillon confirmed that Canada’s oil reserves are estimated at 175 billion barrels, equivalent to 75 years of production at the expected pace of 2030, indicating that the Canadian government has decided to increase Canada’s oil production in the future.
Fillon added, Canada’s oil production is 3.5 million barrels per day and is expected to rise by more than 80 percent in the next 15 years to reach 6.4 million bpd. The current quarter of production goes to the refineries in Canada, and the rest is exported to the United States. Canadian oil companies want to increase their exports to the United States, and to Asia.

Canada is one of the wealthiest countries
Canada’s economy is ranked 11th in terms of size in the world, and Canada ranks among the world’s richest countries , as the service industry dominates the economy, where about three-quarters of the Canadian people work. It is a member of the Organization for Economic Cooperation and Development (OECD) and the G8.

Canada has the highest levels of economic freedom among the developed countries , especially in the cutting of wood, oil, manufacturing, the automotive industry and the aircraft industry, and thanks to its vast coastline, Canada ranks eighth in the fishing sector and the seafood industry worldwide, Had a pivotal role in shaping the features of the Atlantic provinces.

International trade is a major part of the economy, particularly natural resources. In 2009, agriculture, energy, forestry and mining exports represented about 58% of Canada’s total exports.
Equipment, automotive products and other industries accounted for more than 38% of exports in 2009.
Exports account for almost 30% of Canadian GDP. The United States is by far the largest trading partner of Canada, with 73% exports and 63% imports. Canadian imports and exports jointly ranked the eighth level among the world’s nations in 2006.

Canada has a huge amount of natural resources, including the forest industry in British Colombia.
Mining is the main industry in Northern Ontario, where Canada is rich in mineral resources, such as coal, copper, iron ore and gold.

The agricultural sector accounts for only 3% of the total domestic production. Canada has about 280,000 farms, with an average area of 242 hectares. Wheat, cattle and milk contribute for more than half of the value of agricultural income. More than three quarters of the agricultural land are located in the Provinces of Prairie.
Forests, Canada has the world’s first wood production center, and the federal and provincial governments own 90% of forest land, but lease it to the private sector.

Economic Studies Unit
Rawabet Center for Research and Strategic Studies