Time Is Running Out for This Surprise Oil Trade

Keith Kohl

Written By Keith Kohl

Updated May 15, 2024

Time is running out on one specific oil trade.

Do you know which one? 

Before you answer, close your eyes and think to yourself where the most underrated oil players are in the world today. While it may seem obvious to some, I promise you that it’s not likely to come to mind for most people.

Why? Well, because it’s an area so overlooked and taken for granted that most Americans have forgotten about it.

We tend to take a lot of things for granted in the U.S., especially when it comes to energy. I don’t blame most people, mind you. 

After all, we’ve been so spoiled with cheap, abundant energy in the lower 48 states that it’s only natural for things to slip from mind. 

Perhaps some of the veteran members of our investment community have a sharper memory of the days prior to the shale boom, when the U.S. was shackled to the whims of OPEC. Back in the early 2000s, we were buying every drop of OPEC crude we could — more than 4.8 million barrels every day in 2001! 

It was the peak of our oil addiction, and the future of our energy security looked bleak.

Over the next few years, the United States started building massive facilities along the coast just so we could import more natural gas from abroad in the form of LNG.

Ah, but you know as well as I do that this story has a happy ending. 

The tight oil boom that took place was nothing short of a miracle, and not only has the massive amount of oil and natural gas that flowed from our wells over the last 16 years helped us free ourselves from OPEC’s grasp, but those LNG import facilities were reconfigured to allow U.S. LNG exports to reach new markets. 

Last year, the U.S. exported more petroleum and natural gas than ever before. 

But again, our good fortunes blinded us a bit. 

Throughout the entirety of our oil and gas boom, there was still one foreign source of oil we never stopped buying from — in face, we started buying more! 

I’d give you three guesses where this underrated source of oil is from, but I have a feeling my readers only need one: Canada.

Don’t believe me? Well, just take a look for yourself:

canadian oil imports

The problem is that we’ve been so used to being Canada’s only real customer that we’ve forgotten how important that heavy crude is to our refiners; it’s the quality of crude our oil refineries along the Gulf of Mexico crave most and turn into products like diesel. 

Today, we’re importing more than 4.2 million barrels of Canadian crude every single day, and it’s only a matter of time before we hit a point where we’re buying more crude from our friendly neighbors to the north than we ever bought from OPEC. 

Except there’s a slight problem here.

You see, it turns out that starting next month, Canada will have a new buyer for its crude — China. 

I told you a few times this year that once the Trans Mountain Pipeline expansion (TMX) was completed, those overlooked Canadian producers would become the surprise winners in 2024. 

And it appears that time has nearly run out, considering that the TMX expansion is expected to come online in May. 

It couldn’t have come at a better time for China, too. Last year, China imported a record amount of crude oil. And the country has been eager to find new suppliers. India has been competing for cheap Russian oil, which won’t remain cheap for too much longer depending on how Putin’s war in Ukraine plays out. 

What makes the Trans Mountain Pipeline so crucial is that it will finally connect a significant flow of crude oil with the Pacific, which will give a healthy boost to tanker traffic heading into Asia. 

If you’re looking to start your search in the Canadian oil sector, take a closer look at major producers like Cenovus Energy (NYSE: CVE), which is still my favorite stock in the Canadian oil patch. Other companies that stand to benefit from this pipeline going online are infrastructure players like Gibson Energy (TSX: GEI). 

Right now, it’s just a matter of time.

Until next time,

Keith Kohl Signature

Keith Kohl

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A true insider in the technology and energy markets, Keith’s research has helped everyday investors capitalize from the rapid adoption of new technology trends and energy transitions. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital, as well as the investment director of Angel Publishing’s Energy Investor and Technology and Opportunity.

For nearly two decades, Keith has been providing in-depth coverage of the hottest investment trends before they go mainstream — from the shale oil and gas boom in the United States to the red-hot EV revolution currently underway. Keith and his readers have banked hundreds of winning trades on the 5G rollout and on key advancements in robotics and AI technology.

Keith’s keen trading acumen and investment research also extend all the way into the complex biotech sector, where he and his readers take advantage of the newest and most groundbreaking medical therapies being developed by nearly 1,000 biotech companies. His network includes hundreds of experts, from M.D.s and Ph.D.s to lab scientists grinding out the latest medical technology and treatments. You can join his vast investment community and target the most profitable biotech stocks in Keith’s Topline Trader advisory newsletter.

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