Major Canadian oil producers, including Suncor Energy, Cenovus Energy, and Imperial Oil, have outlined ambitious production growth plans for 2025, driven by ongoing project expansions and increased market access.
However, the industry faces potential headwinds from promised trade tariffs from U.S. President-elect Donald Trump.
Suncor projected 2025 production to reach between 810,000 and 840,000 barrels per day, a 4.4% increase from 2024 projections.
“Major economic investments planned or continuing in 2025 include the replacement of the Upgrader 1 coke drums at Base Plant, the development of the Mildred Lake West Mine Extension and West White Rose projects, and the execution of our Petro-Canada retail network improvement plan,” wrote Suncor in its 2025 corporate guidance.
Meanwhile, Cenovus Energy anticipates a similar growth trajectory, with crude output expected to climb to 805,000 to 845,000 barrels per day, primarily fueled by the development of the Narrows Lake oil sands project.
Imperial Oil also forecasts production gains, projecting a 3.1% increase in 2025 output.
These optimistic projections come amidst a backdrop of improving market conditions. U.S. fuel demand is expected to rise in 2024, driven by increased industrial activity benefiting from lower borrowing costs.
Furthermore, the expansion of the Trans Mountain pipeline has significantly enhanced Canadian crude oil exports, providing access to new markets on the Pacific Coast and boosting domestic crude prices.
However, the potential for trade disputes with the United States overshadows the industry’s optimism. The threat of a 25% tariff on Canadian goods, stemming from border security concerns, could significantly impact oil exports to the U.S. market.
Despite this uncertainty, investment banks remain bullish on the sector. BMO Capital Markets, for instance, has expressed confidence in Suncor’s ability to surpass its 2024 production targets, setting the stage for strong performance in the coming year.
