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China sharply increased its purchases of Canadian crude oil and liquefied natural gas in August, new customs data shows, as a deepening trade rift between Ottawa and Washington pushes Canadian energy exporters to lean harder into the Chinese market. Figures released Sunday showed the volume of China’s crude oil imports from Canada climbed nearly 35 percent year over year in August, with the total value of those imports jumping 64 percent to $782.3 million, according to the South China Morning Post’s reporting on the customs release.
The surge did not happen in isolation. China’s imports of Russian energy products also rose sharply over the same period, a pattern that reflects a broader strategy inside Beijing to diversify its energy supply chains amid mounting geopolitical risk, including the ongoing conflict involving Iran, that has made reliance on any single source of imported energy look increasingly precarious to Chinese planners. Canada’s growing role in that diversification effort has been building for more than a year, but the political backdrop driving it has become considerably more pointed in recent months.
At the center of that backdrop is the deteriorating trade relationship between Canada and the United States. President Donald Trump has imposed tariffs of 25 percent on most Canadian goods, with energy products including oil, gas and minerals facing a separate 10 percent tariff, according to OilPrice.com. That pressure has exposed a longstanding structural vulnerability in Canada’s energy sector, one that has quietly persisted for decades. Oil and gas exports account for roughly a quarter of Canada’s total exports and have generated hundreds of billions of dollars in revenue while supporting hundreds of thousands of jobs, yet nearly all of that output has historically flowed south to the United States, a pattern shaped less by strategic choice than by geography and a pipeline network built specifically to serve American refineries.
The completion of the Trans Mountain Pipeline Expansion in 2023 changed that equation meaningfully by giving Alberta’s landlocked oil sands a direct route to Asia-Pacific markets for the first time, bypassing the US-oriented pipeline system entirely. Since the expansion came online, China’s imports of Canadian crude have climbed rapidly. According to data from Vortexa cited by Benzinga, China’s imports of American oil have plunged roughly 90 percent since 2023, falling from a peak of 29 million barrels per month to just 3 million, even as Canadian crude imports through Vancouver have reached record levels. Wenran Jiang, president of the Canada-China Energy and Environment Forum, has said plainly that given the current trade war, Chinese refiners are unlikely to increase US oil purchases going forward.
LNG exports have followed a similar trajectory, though from a smaller starting base. LNG Canada’s first export facility began shipping cargoes to Asian markets last year, and PetroChina received delivery of liquefied natural gas from that facility as Chinese buyers ramped up purchases of Canadian energy products more broadly. The facility’s Phase One operations now ship roughly 14 million tonnes of LNG annually to Asian markets, according to the Canada China Brief newsletter, with a Phase Two expansion designed to double that capacity still awaiting a final investment decision from its multinational consortium of backers, which includes PetroChina holding a 25 percent stake in the pipeline infrastructure built so far.
The political relationship between Ottawa and Beijing has warmed considerably alongside this growing commercial tie. Canadian Prime Minister Mark Carney traveled to China earlier this year on what The Globe and Mail described as a trip meant to reset years of strained relations, during which Ottawa and Beijing signed a memorandum of understanding on strengthening energy cooperation. That agreement specifically recognized Canada as an important potential partner for reliable global oil, LNG and liquefied petroleum gas supply, and separately promoted expanded Canadian uranium sales to China, building on the countries’ existing nuclear trade relationship. Chinese Foreign Minister Wang Yi went as far as calling Carney’s visit a turning point in the two countries’ relationship following years of tension.
The economic numbers behind Canada’s broader export shift toward China have been substantial. According to The Star’s reporting on Canadian trade data, crude petroleum exports to China more than doubled to C$5.96 billion, contributing C$3.2 billion of the overall increase in Canadian exports to the country, while copper ore and concentrate exports also climbed significantly. Carney has set an explicit national target of doubling Canadian exports to markets outside the United States over the next decade, and China’s growing appetite for Canadian energy and critical minerals appears positioned to play a central role in reaching that goal.
Pricing dynamics have made the shift financially attractive for Canadian producers as well, not just strategically useful. Oil sold into Asia-Pacific markets, including China, is priced against the Brent benchmark, which typically trades higher than the Western Canada Select benchmark used for sales into the United States, according to analysis from the Asia Pacific Foundation of Canada. That pricing gap means Canadian producers generally secure better returns selling into China than they do selling south of the border, adding a straightforward commercial incentive on top of the political and strategic motivations driving the shift. Notably, Vancouver-loaded crude has recently begun trading at a premium to Canadian barrels shipped south through pipelines to Texas, according to Argus data cited by The Cradle, a reversal that had not occurred since at least September 2024.
China still imports only a little over 1 percent of its total crude oil from Canada, leaving substantial room for further growth given Beijing’s stated policy of not sourcing more than 20 percent of its oil from any single country. Whether Canadian exports continue climbing toward that ceiling will likely depend on how the Trump administration’s tariff policy evolves, how quickly Trans Mountain and LNG Canada’s export infrastructure expands, and whether the broader geopolitical instability currently pushing China toward supply diversification persists or eases in the months ahead. Continuing coverage of how shifting global trade relationships are reshaping energy markets is available on Business Tech. Additional detail on this month’s customs figures is available through the South China Morning Post’s reporting, and further background on Canada’s LNG export infrastructure can be found through LNG Canada’s official site.
