With the benefit of hindsight, the Trans Mountain pipeline expansion (TMX) is proving to be worth every penny of its inflated $34 billion price tag.
Barely a year after coming into service, China has overtaken the United States as the leading buyer of crude shipped through the newly expanded system, diversifying this country’s reliance on American exports even as trade tensions escalate.
Designed to give Alberta’s landlocked oil sands access to tidewater, the pipeline was widely expected to bolster exports to US West Coast refiners. Instead, it has opened the door to Asia, especially China.
Data from ship tracking firm Kpler shows China purchased an average of 207,000 barrels per day (bpd) from Trans Mountain since it ramped up to full capacity in mid-2024, surpassing the US intake of 173,000 bpd over the same period.
That marks a dramatic change from the pre-expansion decade when China imported just 7,000 bpd on average from Canada.
It also comes as relations with Washington remain frayed under President Donald Trump’s second administration amid tariffs and Trump’s threats to annex Canada as his fifty-first state.
China’s pivot to Canadian oil also coincides with a steep drop in its US crude imports as a result of its own trade battles with Trump.
“China’s increased purchases reflect not just commercial opportunity, but also political pragmatism,” said Philippe Rheault, director of the China Institute at the University of Alberta. “With US sanctions on other suppliers like Russia and Venezuela, Chinese refiners are hedging by tapping into Canadian crude.”
Despite the surge in Asian demand, TMX has yet to reach its full potential. In 2024, the pipeline ran at about 77% capacity, falling short of the 83% utilization — or 890,000 bpd — initially forecast.
Documents filed with the Canada Energy Regulator (CER) cite high tolls charged to oil producers using the pipeline as a key deterrent.
Those fees, which soared to $10.88 per barrel from a previous rate of $5.76, are now the subject of formal dispute before the regulator.
Parkland Corp., owner of the Burnaby refinery, has warned that the elevated fees will inflate gasoline and diesel prices. In a letter to the CER, Parkland called the rate hike “dramatic” and “not in the public interest.”
Similarly, producers like Canadian Natural Resources, Suncor, and Cenovus have called the tolls unwarranted and even “absurd” in documents filed with the CER.
Experts are divided. Simon Fraser University’s Tom Gunton has argued that the tolls constitute a taxpayer subsidy, suggesting they would need to double to fully recover the $18.8 billion in cost overruns.
Meanwhile, University of Calgary economist Trevor Tombe said that even at $11 per barrel, the pipeline offers better economics than transporting crude by rail.
Public hearings on the contested tolls are now scheduled to begin this summer, further delaying a final CER decision.
Still, the arrival of TMX marks a strategic turning point for Canada’s energy sector. The ability to export nearly 1 million bpd to tidewater fundamentally alters Canada’s leverage — not only in trade negotiations with the US, but also in its broader foreign policy posture toward the Indo-Pacific region.
Indeed, Alberta crude is now routinely displacing Middle Eastern barrels in East Asia.
This newfound export flexibility has also lifted the value of Western Canadian barrels, which have historically traded at a deep discount to US benchmark oil prices. Analysts estimate that Alberta oil shipped to tidewater can fetch $5 to $6 more per barrel compared to deliveries to the American Midwest.
Meanwhile, American refiners have to replace those barrels with their own higher-priced supplies, negating any advantage of buying cheaper Western Canadian Select (WCS) to run in their purpose-built refineries.
Yet challenges remain.
Bottlenecks at the Port of Vancouver have limited the size and frequency of tanker shipments while regulatory and political uncertainty continues to chill further investment in new pipelines.
While Prime Minister Mark Carney has signalled a willingness to revisit the federal emissions cap and project review laws like C-69, no major pipeline projects are currently in the queue.
Former environment minister Steven Guilbeault this week emphasized that “less than half” of TMX’s capacity is being used — a figure disputed by industry — and urged Ottawa to focus on maximizing existing infrastructure before approving more capacity.
Still, with China’s energy demand remaining robust and Western Canadian crude offering a geopolitically stable, refinery-compatible alternative, experts believe the long-term trend is clear.
“Barring a dramatic reversal in trade policy or diplomatic relations, China is likely to remain a cornerstone buyer of TMX crude,” said Rheault.