Alberta’s Restriction on Crude Shipments to Impact O&G Industry Trends

Alberta has recently introduced a legislation allowing it to cut exports of oil & gas to British Columbia. Sources cite that Alberta's action has sent ripples across the west coast of North America in turn causing the oil & gas industry to witness a surge in pump prices and shifting the flow of international crude.

According to reports, the new bill which was introduced by the energy minister would allow the oil-rich provinces such as Alberta to restrain the flow of crude, fuel, and gas if British Columbia would not let go off its opposition to Kinder Morgan's Trans Mountain pipeline expansion. Sources further reveal that the present pipeline supplies the Vancouver region with more than 60% of its refined products. The refinery accounts for more than a quarter of B.C. transportation fuel.

According to the Financial Post, Saskatchewan is also planning to follow suit and join Alberta in B.C. Trans Mountain fight by introducing its own oil ban bill.

Experts deem that if Alberta makes good on its oil & gas halt threat, the drivers in B.C. are most likely to see gasoline price soar and face shortage of crude and fuel. Reports also claim that Canada's second-busiest airport in Vancouver would significantly suffer from higher jet fuels process. Not just that, analysts speculate that it is also a loss for Alberta's oil & gas industry majors as they will be losing their key market for their refined and crude products.

Sources cite that the restriction of flow of oil & gas can shoot the price of gasoline to USD 2 a liter from about USD 1.50 now in Vancouver. The jump in the fuel prices will also be felt all the way down in Los Angeles, anticipate industry experts, if traders ship cheaper jet fuel, gasoline, and diesel from the California refineries up north.

Analysts deem that the escalating conflict between the Canadian provinces would be a major blow to the regional oil & gas industry, which already is being dogged by relatively lower prices for its crude.

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