Canadian oil reserves sit at 170 billion barrels, but oil prices are still soaring
By: Charlotte Hui
Since the war between Russia and Ukraine, most of the global community has imposed sanctions on Russian oil imports, affecting global oil prices and gas.
The European Union and the United States have imposed the most detrimental sanctions that cost Russia about half of its total oil revenues. However, since full sanctions take months to take effect, Russia can sell its oil elsewhere. Meanwhile, many European countries have been indirectly affected by the sanctions. Lithuania and Finland, for example, get 80 percent of their oil and gas from Russia. The sanctions continue to see oil and gas prices climb to record highs.
In Canada and the United States, gas prices are also at record levels, but the big oil companies continue to make huge profits from the sanctions at the expense of the end-users.
Enbridge Inc., Canada’s no. 1 oil company by revenue as of 2021, according to Statista 2022, earns $33.67 billion annually. Suncor Energy Inc ranks second, making $24.61 billion a year, and the top 10 companies have base revenues ranging from $10 billion to $25 billion a year.
The top five U.S. oil companies, Shell, ExxonMobil, BP, Chevron, and ConocoPhillips, saw their revenues increase by 300 percent after the War between Russia and Ukraine, to more than $35 billion in three months.
In Canada, prices have risen from $1.40 cents a litre to as high as $2.36 per litre in some provinces, however, this is not because Canada is in short supply.
According to the Statistical Review of World Energy and U.S. Energy Information Administration, Canada has 170 billion barrels of oil reserves, ranking third in the world, accounting for 10.4 percent of the world’s total, just behind Saudi Arabia and Venezuela. Russia ranked eighth, but Canada’s large reserves have not lowered the oil price.
“The boom-bust cycle of oil is well known. When prices are high, companies dig new wells, buy new equipment and hire new employees. They do everything they can to squeeze out as much profit as possible while prices are high,” Rory Johnston, author of the newsletter Commodity Context and managing director at Price Street Inc.
High gas prices will continue to be problematic, thus reducing the need for travellers to consume copious amounts of gas. With the reduced need for various modes of transportation, the cost will continue to rise as the oil and gas companies intend to extract the maximum amount of money from their users while the wells are overflowing.