China leads Canada’s oil pivot to Asia as Mid-East war reshapes crude trade
Canada’s expanded Trans Mountain pipeline sends more Alberta heavy crude to Asia
Canada is moving faster to send heavy crude to Asia to fill the gap left by the US-Israel war with Iran that saw a prolonged tanker squeeze in the Strait of Hormuz.
The government-owned Trans Mountain pipeline (TMX) which saw a $25-billion expansion in 2024, is now serving key Asian markets amid disruptions to Middle Eastern supplies and friction in its trade relationship with the US.
The result: a deepening demand for Canadian barrels across the Pacific .
Asia, led by China, is expected to take about 70% of Canadian crude exported through the Trans Mountain pipeline, Mark Maki, chief executive of the government-owned pipeline operator, told Reuters earlier this month at the Asia Pacific Petroleum Conference in Singapore.
The 890,000-barrel-per-day Trans Mountain system carries Alberta oil to British Columbia’s coast, giving Canadian producers a direct outlet to Asian markets rather than relying predominantly on US buyers.
The pipeline hit full capacity for the first time in June.
The Trans Mountain Pipeline, owned by the Canadian government, is a 1,150-km (715 miles) petroleum transport system running from Edmonton, Alberta, to Burnaby, British Columbia. Originally built in 1953, it is Canada's only pipeline system connecting Alberta’s oil fields directly to the Pacific coast, enabling international marine exports primarily to Asian and US West Coast markets.
FAST FACTS:
TMX moves 890,000 barrels of oil per day (bopd) of crude from Alberta to British Columbia's coast, Canada's first direct tidewater access to Asian buyings such as China, India, and Japan.
Currently, Asia absorbs roughly 70% to 77% of shipments out of the Westridge Marine Terminal.
The current Westridge terminal limits access to Aframax tankers rather than massive VLCCs.
Middle East supply disruptions have accelerated Asian demand for heavy Canadian crude.
Canadian regulators approved a new framework increasing contracted shipping capacity to 90%.
Optimisation, due in the last quarter of 2026, will add another 90,000 bopd of "takeaway capacity", OilPrice.com reported.
By 2028, expansion projects aim to reach roughly 1.19 million bopd total capacity.
Supplying to Asia
About two-thirds of vessels leaving the Westridge Marine Terminal near Vancouver currently sail to Asia, Maki told Reuters.
The Trans Mountain Pipeline, managed and operated by the Trans Mountain Corporation (TMC), is owned by the Government of Canada through the Canada Development Investment Corporation (CDEV), a federal "Crown corporation".
640 crude oil tankers loaded
Between May 2024 and July 2026, roughly two-thirds of an estimated 640 crude oil tankers loaded at the terminal arrived in Asia, according to shipping estimates cited by The Business Times.
China is expected to remain the biggest single customer for Canadian heavy crude, Maki said, citing its use as petrochemical feedstock.
India, Japan, South Korea and Vietnam could increase purchases, while Thailand is seen as a potential new buyer.
The changing flows come as the US-Israeli war on Iran has disrupted Middle East oil supplies and led Asian importers to reassess supply security, according to Reuters and Bloomberg reporting.
'Closer in quality to Mid-East oil'
Maki told Bloomberg that Canadian heavy crude, which is more viscous and sulfur-rich than benchmark US grades such as West Texas Intermediate (WTI), is closer in quality to some Middle Eastern barrels and is drawing strong interest in China.
Trans Mountain plans to add 90,000 barrels per day of capacity in the fourth quarter, followed by another 210,000 barrels per day by the end of 2028, Maki told Reuters.
Bloomberg separately reported that the company aims to raise the amount of oil it can ship to the West Coast to 1.2 million barrels a day by the end of 2028.
Canada’s non-US crude exports averaged about 430,000 barrels a day in 2025 and were valued at C$10 billion (US$7.2 billion), up from effectively zero before the Trans Mountain expansion opened in 2024, according to the Asia Pacific Foundation of Canada, as cited by The Business Times.
Ramping up Canadian oil flow to Asia
Asian share: Maki was quoted as saying that about two-thirds of departing ships go to Asia. He projects Asia could take 70% of exports as capacity grows.
Pipeline capacity: The operating capacity is 890,000 barrels per day. Reuters reported planned additions of 90,000 barrels per day in late 2026 and 210,000 barrels per day by end-2028, potentially ramping up oil shipments to the West Coast to 1.2 million bopd by end-2028.
Geopolitical driver: The ramp in demand for Canadian oil has been attributed to the Middle East supply disruptions due to the crisis over control of the Strait of Hormuz, currently seen as a "chokepoint" of oil flow from the Gulf to global markets.
Southeast Asia: There's been a notable interest from ASEAN buyers for Canadian oil, though it may not immediately translate into large volumes. The Business Times reported that many Southeast Asian refineries may not yet be configured to process Canada’s heavy crude easily, despite potential demand in Thailand, Malaysia, Indonesia and Vietnam, according to Singapore-based Business Times.
Direct shipping: Trans Mountain provides a West Coast export route to Asia that skips traditional stopover off the California coast. Instead of transferring cargo onto massive supertankers, known as VLCCs (very large crude carrier), medium-sized "Aframax" tankers are now reportedly sailing directly from Vancouver to Asian markets. This "operational shift" is driven by surging supertanker freight costs, which have made the direct route far more cost-effective. Vancouver's Westridge Marine Terminal has shallow water restrictions. Super-sized tankers cannot physically enter the port. Only smaller Aframax tankers can load there.
