In a major energy realignment with global implications, China has dramatically slashed its oil imports from the United States — down by nearly 90% — and is now importing record amounts of Canadian crude oil instead. This pivot comes amid escalating trade tensions with Washington and rising tariffs, prompting Beijing to seek a more stable, cost-effective, and politically neutral supplier: Canada.
With China being the world’s largest oil importer, this shift in preference is more than a logistical change — it’s a strategic energy maneuver that signals a recalibration in international alliances and trade dependencies. And at the heart of this development is Canada’s expanded Trans Mountain pipeline, which has opened up a direct route from Alberta’s oil fields to Pacific ports — and straight into Chinese refineries.
Why Did China Slash U.S. Oil Imports?
China’s dramatic drop in American oil imports is rooted in deepening U.S.-China trade tensions. Over the last few years, both nations have exchanged tariffs on hundreds of billions of dollars in goods. Oil — once a quiet bystander in the trade war — has now become a symbol of political retaliation.
Beijing imposed retaliatory tariffs on American crude oil in 2018, and although there were brief recoveries, the long-term trust in U.S. energy reliability has been eroded. Geopolitical unpredictability, combined with increasing scrutiny on Chinese investments and operations in the U.S., has made American oil less appealing, both economically and diplomatically.
Why Canada?
Canada, in contrast, presents a more politically neutral and resource-rich alternative. Alberta’s oil sands hold one of the largest crude reserves in the world, and Canadian companies have been eager to tap into Asian markets beyond their traditional U.S. customer base.
Two factors make Canadian oil particularly attractive to China:
- Lower price per barrel, especially for high-sulfur, heavy crude that’s cheaper but still compatible with China’s refinery systems.
- Logistical upgrades, especially the Trans Mountain Expansion Project (TMX) — a game-changer that added nearly 600,000 barrels per day of export capacity from Alberta to the west coast of Canada.
With TMX completed, shipping oil directly to Asia has become faster, cheaper, and politically safer — making Canada China’s new go-to oil supplier.
Record-Breaking Oil Imports in 2025
In March 2025, China set a new record by importing 7.3 million barrels of crude oil from Canada — a figure that reflects the new reality of Asia-Pacific energy dynamics. This surge represents a historic high, up 260% year-over-year.
According to trade analysts, Chinese refiners have locked in long-term contracts with Canadian producers, ensuring a steady supply regardless of global disruptions. This is particularly crucial as oil prices remain volatile due to ongoing conflicts and climate-related disasters worldwide.
How This Shift Changes Global Oil Flows
The shift in China’s energy sourcing has ripple effects across the globe:
- U.S. oil producers lose one of their top export markets.
- Canada’s energy sector diversifies away from U.S. dependence.
- Asia-Pacific shipping routes grow in importance for global energy transit.
- OPEC influence wanes, as non-OPEC suppliers like Canada take larger market share in China.
This trend also strengthens China’s “Energy Belt and Road” initiative, where Beijing strategically invests in infrastructure that ensures uninterrupted access to global energy sources.
The Role of Alberta’s Heavy Crude
Canada’s oil exports to China primarily consist of Western Canadian Select (WCS), a heavy, sour crude that was once viewed as inferior. However, WCS is now gaining favor due to its cost-effectiveness and China’s advanced refinery capacity, which can process this grade efficiently.
Chinese refineries, many of which were built with flexibility in mind, can handle WCS without major upgrades. Plus, Chinese buyers are taking advantage of favorable shipping rates and bulk pricing deals, creating a win-win for both countries.
Environmental and Political Criticism
Despite the economic benefits, not everyone is celebrating. Environmental groups have long criticized Canada’s oil sands for being among the most carbon-intensive forms of oil extraction. Increased exports to China raise new questions about Canada’s commitment to climate targets.
Politically, critics argue that this deepening China-Canada oil relationship might entangle Canada in future diplomatic disputes, especially if tensions between China and Western allies escalate.
However, proponents point out that until green energy fully replaces fossil fuels, diversifying trade partners is a pragmatic and necessary step.
What This Means for Canada’s Economy
For Canada, this pivot is a monumental win. It opens up new markets, strengthens Alberta’s struggling oil sector, and reduces dependency on the U.S., which has historically been its largest (and sometimes only) customer for crude oil.
The energy industry — a major contributor to Canada’s GDP — is expected to benefit from billions in new revenue, job creation in logistics and infrastructure, and greater bargaining power in global oil pricing negotiations.
The Road Ahead
The question now is: Will this trend last? With elections on the horizon in the U.S., and continued volatility in global markets, trade patterns may shift again. But for now, China’s pivot toward Canadian oil appears long-term and strategic.
Energy analysts suggest that Canada could become one of China’s top five oil suppliers by 2026 if current trends hold — a transformation that would have been unthinkable just a decade ago.
As countries grapple with energy security, climate goals, and economic diplomacy, oil remains at the heart of international influence. And in this new chapter of global energy politics, Canada and China may just have struck black gold — together.
