President Donald Trump of the United States has suggested the possibility of reviving the Keystone XL oil pipeline project, which was previously canceled by two former presidents, within the framework of a new trade agreement with Canada. However, industry experts, including a former executive of the project, believe that Trump’s statement might be more politically motivated than related to the petroleum industry.
In a recent social media update just before new tariffs on Canadian goods were set to take effect, Trump announced a temporary halt on tariffs and a trade deal with Canada, hinting at the revival of the Keystone XL Pipeline that was halted under the administration of his predecessor, Joe Biden.
Prime Minister Mark Carney did not directly address Trump’s remarks in his response to the post.
U.S. President Donald Trump has paused 50 per cent tariffs on Canada, saying the two countries have reached a new trade deal that just needs to be finalized. In a statement, Prime Minister Mark Carney said ‘substantial progress has been made.’
Keystone XL Project Consideration
Dennis McConaghy, former executive vice-president of TransCanada Corporation, expressed that Trump’s mention of the Keystone XL Pipeline within the trade deal context could affect the negotiations between the two countries. Since February 1, 2025, Trump has imposed tariffs on various Canadian goods, impacting sectors like auto parts, lumber, steel, and aluminum.
Despite his previous stance on not needing Canadian resources, Trump’s reference to the Keystone XL Pipeline has been viewed positively by some experts. However, concerns remain regarding the project’s feasibility due to political and environmental challenges.
Carlo Dade from the University of Calgary highlighted the challenges of reviving the Keystone XL Project, especially with potential Democratic administrations in the future. The project’s approval could be easier for the Canadian government compared to the U.S. due to political uncertainties.
Rory Johnston, founder of Commodity Context, emphasized that Trump’s comments on reviving the Keystone XL Pipeline could be seen as a response to previous administrations’ policies, rather than a practical decision.
Ottawa’s Interest in Keystone XL
A significant portion of Canada’s oil exports are directed to the U.S., with the Keystone Pipeline System serving as a key route for Canadian and U.S. crude oil shipments. South Bow Corp., the operator of the pipeline system, has been exploring options to enhance connectivity and export capabilities.