Home Energy Energy-General Haley Zaremba Haley Zaremba is an energy journalist and researcher with more than a decade of professional experience covering global energy systems, land and natural resources, and... More Info Set us as your preferred Google source Premium Content By Haley Zaremba - Oct 23, 2026, 5:00 PM CDT Oil, gas and electricity were exempt from Trump’s new 50% tariffs on Canadian goods because Canada supplies half of U.S. foreign petroleum imports and is the only foreign country that feeds power directly into the U.S. grid. The dependence runs both ways: 84% of Canada’s oil and 76% of its electricity went to U.S. buyers in 2024.
Venezuelan crude is flowing to Gulf Coast refiners and Carney is pitching LNG to Turkey, but neither comes close to replacing the U.S. market. The United States and Canada are locked in an energy trade war – sort of. Although United States President Donald Trump and Canadian Prime Minister Mark Carney have lobbed plenty of blisteringly high tariffs, not to mention threats and insults, at each other over the course of their respective tenures, they have not touched one very important commodity – oil and gas.
This is because the nations are simply too dependent on each other to sever the ties between their respective fossil fuel empires, making true independence a purely pyrrhic possibility. Canada is the single biggest international supplier of petroleum to the United States, amounting to half of the country’s foreign petroleum imports. There are also more than 30 major electricity transmission points between the United States and Canada, making Canada the only foreign country to directly supply electricity to the States.
The longest transmission line, bringing electricity produced from Canadian hydropower directly to New York City, was just completed in June . Huge parts of the Northeast United States are heavily dependent on Canadian hydro to power their grids, while the country’s energy sector as a whole is largely dependent on Canadian fossil fuels. This dependency is reflected in the political fighting between the two countries.
Back in July of this year, Trump imposed 50 percent tariffs on a wide range of Canadian imports to the United States, which Canada then reciprocated for American imports to Canada. But oil, gas, electricity, and some petroleum products were notably exempt from the bill . While Donald Trump has talked a big game about cutting Canada out of the United States’ energy sector, “the facts, and his own policies, say otherwise” according to a recent headline from Canadian news outlet Energy Now.
“The reality is that Canadian and American energy systems have been constructed over decades as one highly integrated continental network,” the report goes on to detail. “Pipelines, refineries, natural gas systems, electricity grids and fuel-distribution networks do not stop functioning simply because a politician declares that one country no longer needs the other.” However, this dependency goes both ways. “Over the past 50 years Canada has expanded its energy production with one specific goal: serving U.S. consumption,” The Conversation recently reported, noting that in 2024, a whopping 84 percent of Canada’s oil and 76 percent of its electricity were sent directly to United States consumers.
“Without American buyers, there is no real energy market in Canada,” the report concludes. And this puts Canadian producers in a tough spot, especially as the United States ramps up its oil imports from Venezuela. Gulf Coast refineries are importing more and more crude from the South American nation after the Trump administration ousted and arrested Venezuelan Nicolas Maduro in January of this year and made aggressive moves to revive the country’s oil industry for American interests.
While Venezuelan crude is more expensive than Canadian, and the country’s infrastructure remains in disarray, the increased flow of barrels is already proving to be a factor in rising costs for Canadian oil producers . Canada, too, is trying to ease its reliance on its Southern neighbor by cozying up to other potential buyers. Carney is currently in Ankara, Turkey, where he is forging energy and defense deals with Turkish President Recep Tayyip Erdogan.
As part of these deals, Canada plans to ramp up its exports of liquefied natural gas to Turkey, a major global economy and potentially lucrative trading partner. However, the reality is that Venezuela is not Canada, and Turkey is not the United States. These new trade deals can’t dream of making a noticeable dent in trade between the North American frenemies.
While Carney and Trump duke it out in the headlines, the political reality is largely status quo. “The current reality on the ground shows an integrated energy system between the two nations: something very difficult and costly to untangle, and a process that would take decades to reengineer,” concludes The Conversation. By Haley Zaremba for Oilprice.com More Top Reads From Oilprice.com Oil India Strikes Natural Gas in Shallow Offshore Basin Middle East Physical Crude Slides While Brent Hits Five-Month High NASA's Freeze-Resistant Moon Battery Could Eventually Reach EVs Download The Free Oilprice App Today Back to homepage Haley Zaremba Haley Zaremba is an energy journalist and researcher with more than a decade of professional experience covering global energy systems, land and natural resources, and...
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