Why Canada Is Unlikely to Sell the Last Barrel of Oil

The document argues that Canadian oil producers face an existential threat as global oil demand is projected to peak around 2030. While Canada's heavy reliance on U.S. refineries provides a temporary buffer, this will not shield the sector from falling global prices and declining demand. The brief concludes that ESG credentials and production costs are insufficient to maintain competitiveness against Middle Eastern producers, necessitating urgent economic diversification.

• Global oil demand is projected to peak around 2030, with subsequent significant declines driven by new technologies and climate policies.
• Canada's heavy reliance on the U.S. market, where over 94% of exports go, provides a partial buffer against demand drops, but this is undermined by declining U.S. domestic demand and the impact of the U.S. Inflation Reduction Act.
• Environmental, social, and governance (ESG) credentials will not help Canada maintain its market share because oil refineries prioritize quantity, quality, and price over ESG factors.
• Canada is not a low-cost oil producer compared to Middle Eastern competitors, leaving it at a cost disadvantage in a shrinking global market.
• The post-peak oil market is expected to be characterized by low and volatile prices, potentially exacerbated by a 'green paradox' where producers rush to extract reserves before they lose value, and a breakdown in OPEC-plus discipline.
• The decline of the oil sector will likely lead to the failure of marginal producers, low profits for efficient ones, reduced tax and royalty revenues, and significant job losses.

APA

Cosbey,, A. (2022). Why Canada Is Unlikely to Sell the Last Barrel of Oil. International Institute for Sustainable Development. https://www.iisd.org/articles/deep-dive/why-canada-unlikely-sell-last-barrel-oil

Chicago

Cosbey,, Aaron. Why Canada Is Unlikely to Sell the Last Barrel of Oil. International Institute for Sustainable Development, 2022. https://www.iisd.org/articles/deep-dive/why-canada-unlikely-sell-last-barrel-oil.

Wikipedia

{{cite report |last1=Cosbey, |first1=Aaron |title=Why Canada Is Unlikely to Sell the Last Barrel of Oil |publisher=International Institute for Sustainable Development |date=14 December 2022 |url=https://www.iisd.org/articles/deep-dive/why-canada-unlikely-sell-last-barrel-oil |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{cosbey2022why, author = {Cosbey,, Aaron}, title = {{Why Canada Is Unlikely to Sell the Last Barrel of Oil}}, institution = {International Institute for Sustainable Development}, year = {2022}, month = dec, url = {https://www.iisd.org/articles/deep-dive/why-canada-unlikely-sell-last-barrel-oil}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }