While the U.S. produces a lot of oil, it mostly uses Canadian oil for gasoline
of ConsumerAffairsTariffs on Canadian and Mexican imports went into effect this week, including a 10% tariff on Canadian oil. While U.S. consumers dont purchase crude oil, U.S. refineries do and the tariff is likely to result in higher prices at the gas pump.
According to Patrick DeHaan, head of Petroleum Analysis at GasBuddy, the tariffs will be felt more in some areas of the country than others. Some of the biggest price increases will occur in the Northeast, in areas like Maine, Rhode Island, Connecticut, Vermont, New Hampshire, Massachusetts, and Upstate New York.
If youre filling up in the Northeast, youll see price increases first and more significantly, as a significant portion of this regions fuel comes directly from the Irving Oil refinery in Saint John, New Brunswick, Canada, DeHaan wrote in the GasBuddy blog.
The refined products crossing the border would immediately incur the tariff costs. By mid-March 2025, the Northeast could expect fuel pricesincluding gasoline, diesel, and other petroleum productsto be 20 to 40 cents per gallon higher. For a typical 15-gallon fill-up, thats an additional $3-$6 every time you visit the pump.
But other regions that purchase gasoline from American refineries will also feel the sting of the Canadian tariff. Thats because American refineries depend on Canadian crude, not the very abundant U.S.-produced crude oil.
Dependent on Canadian crude
Our pipeline infrastructure simply isnt designed to accommodate such a dramatic shift, DeHaan said. The network that currently serves refineries across the Midwest, Great Lakes, and Rockies was specifically constructed to deliver Canadian heavy crude, and these pipelines only flow in one direction south.
To transport substantial quantities of U.S. crude primarily from the Permian Basin in Texas or the Bakken in North Dakota to these northern refineries would require entirely new pipeline configurations or reversing existing flows. Thats not happening overnight. Were talking years of planning, billions in investment, and navigating complex regulations.
DeHaan said the Canadian oil tariff would likely raise gas prices, to some extent, in the Midwest, Mountain West, Great Lakes region while the Southeast, Mid-Atlantic and West Coast may see only slight increases.
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Posted: 2025-03-05 12:00:30
