China-Canada Energy Cooperation: Geopolitical Shifts in the Shale Oil Era

Trump never expected that after severing China’s oil ties with Venezuela, China would turn around and find a more stable partner. Coincidentally, Canada is seeking new outlets for its massive oil production, including large shale oil resources, which are exactly the alternative the Chinese refining industry urgently needs.

Venezuela’s Losses, Canada’s Shale Oil Becomes the New Choice

The Trump administration issued an ultimatum to Venezuela, demanding exclusive cooperation with the U.S. on oil trade and forcing Chinese companies to withdraw. Previously, about 80% of Venezuela’s oil was supplied at low prices to China, with the intention of cutting off China’s energy lifeline.

But that was not the case. As the world’s fourth-largest oil producer, Alberta’s heavy and shale oil resources are abundant, with physical properties similar to Venezuelan crude, making them the best substitute. Crucially, the expansion of the trans-mountain pipeline has opened an export route for Canadian crude to the Pacific, perfectly meeting China’s demand for stable oil supplies.

Chinese companies responded swiftly. After the turmoil in Venezuela, Chinese refining enterprises immediately intensified inquiries about Canadian crude. Traders revealed that refineries with long-term purchases of Venezuelan oil are now evaluating Canadian oil types. The 22 million barrels of Venezuelan crude stockpiled in Asian waters can only support two months of consumption, so China must quickly find alternative sources.

Transportation Distance and Cost: Why Canada Is More Competitive

On the surface, Canadian crude is priced $8 to $9 higher per barrel than Venezuelan oil, which seems like a disadvantage. But transportation efficiency advantages can change the entire calculation.

It takes only 17 days for Canadian crude to reach China, far less than the 57 days for Venezuelan oil, saving over 40 days of shipping time. More importantly, through the trans-mountain pipeline and flexible shipping options, Chinese refineries can adjust tanker types and transportation methods based on market demand. This supply chain flexibility is especially valuable in the complex global trade environment. Comprehensive calculations show that the benefits from transportation efficiency and supply stability far outweigh the $8–$9 per barrel price difference.

Additionally, Canada’s shale oil reserves are abundant, with mature development technology capable of providing long-term stable supply. For China, which relies heavily on energy imports, this significantly enhances energy security.

The Cost of Unilateral Policies: How to Push Allies Toward Opponents

Trump’s policy logic produced unexpected countereffects. His tariffs on Canada and even threats of annexation made Canada realize—over-reliance on the U.S. entails huge risks.

Bank of Canada officials, including Governor Tiff Macklem, publicly stated, “Canada-China relations are more predictable.” This statement not only affirms energy cooperation with China but also subtly opposes U.S. unilateralism. Ironically, Trump’s attempt to control Venezuelan oil to choke China’s energy supply overlooked a simple fact: Canada previously exported 97% of its oil to the U.S., but now is eager to develop new markets.

This “forcing allies toward opponents” strategy is a textbook example of strategic miscalculation.

Reshaping the Energy Landscape: How China-Canada Cooperation Undermines U.S. Influence

Since 2025, China’s maritime crude oil imports from Canada have reached nearly 40%, with the share still rising. More symbolically, Canadian crude transported via the trans-mountain pipeline to China accounts for 64%, far exceeding the proportion sent to the U.S. The energy resources once considered the “backyard” of the U.S. are now flowing eastward.

Compared to the U.S.’s “grab and dominate,” China-Canada energy cooperation demonstrates mutual benefit and win-win outcomes. Canada has opened up shale oil development rights in Alberta and offshore oil and gas rights in Newfoundland, while China provides a stable long-term market. This trust-based cooperation mechanism is far more sustainable than unilateral hegemonic deals by the U.S.

Chinese companies’ interest in Canadian shale oil is also growing. The maturity of shale oil extraction technology and declining costs make this energy form a key part of the global energy restructuring. Through direct investment and technological cooperation in Canada, China not only secures energy supplies but also participates in the entire shale oil industry chain.

Strategic Reflection: The Deep Logic Behind Hegemony’s Decline

Ultimately, China-Canada oil cooperation is not “just a coincidence,” but an inevitable result of Trump’s policy logic. His unilateral containment policies alienated traditional allies and inadvertently helped opponents find new pathways, exposing the fragility of a hegemonic system based on threats and coercion.

America’s energy hegemony is shaking. Once taken for granted, energy advantages are now catalysts for eroding its global influence. The rising China-Canada energy cooperation is just a microcosm of this major shift. In the new geopolitical landscape, mutually beneficial cooperation is increasingly challenging unilateral dominance.