The ink is barely dry on Trump’s 10% tariff on Canadian energy, and already, fuel prices are bracing for impact. As GasBuddy’s Patrick De Haan puts it, “The real-world impact of tariffs won’t be to shift refining patterns, instead, it will be to add costs throughout the system.” Translation? Expect to shell out more at the pump, GasBuddy predicts.
So why can’t U.S. refiners just swap out Canadian crude for American oil? Simple: decades of infrastructure, billions in investment, and the laws of physics. The pipeline system serving the Midwest, Great Lakes, and Rockies was built to transport Canadian heavy crude south—not the light, sweet variety coming from Texas or North Dakota. That’s like asking a downhill skier to suddenly ski uphill.
Then there’s the small issue of refinery compatibility. The facilities designed for Canadian heavy crude aren’t just being picky—they literally can’t process light U.S. shale oil without a multi-billion-dollar retrofit. As GasBuddy explains, it’s like filling a diesel truck with regular gasoline. Could it be done? Sure, if you don’t mind catastrophic failure.
Where will it hurt the most? According to Gas Buddy, the Northeast is first in line for sticker shock, as it depends heavily on refined products from Canada. Prices there could spike 20-40 cents per gallon by mid-March. The Midwest and Great Lakes regions, where Canadian crude feeds local refineries, will see increases of 5-25 cents per gallon in the coming weeks. The Rockies won’t be spared either, with hikes of 10-20 cents expected.
Meanwhile, oil prices have already dropped on the news, with WTI at $67.31 and Brent at $70.27—a sign that traders anticipate demand destruction. But don’t celebrate just yet. Those lower crude prices aren’t translating to savings at the pump. Instead, consumers are about to get caught between tariffs, refinery bottlenecks, and seasonal price hikes.
Source: By Julianne Geiger from Oilprice.com