S&P Global Commodity Insights Raises 10-year Production Outlook for Canadian Oil Sands

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S&P Global Commodity Insights has raised its 10-year oil sands production outlook for Canadian oil sands, with production expected to reach 3.8 million barrels per day by 2030, representing a 3% increase from the previous forecast. The increased projection is attributed to producers' focus on maximizing existing assets through efficiency and optimization projects. However, challenges such as export capacity constraints and potential impacts of federal emission caps may affect the long-term growth of oil sands production.

  • Increased oil sands production outlook by S&P Global Commodity Insights, with production expected to reach 3.8 million barrels per day by 2030.

  • Producers' focus on efficiency and optimization projects contributing to higher output and lower costs.

  • Extended period of higher oil prices leading to ambitious projects and advancements in leveraging existing infrastructure.

  • Potential headwinds towards the end of the decade may lead to a plateauing of oil sands production due to optimization opportunities and uncertainties related to emission caps.

  • Export capacity challenges expected in the coming years, with the need for new pipelines or further optimization of existing ones to maintain system balance.

  • Uncertainty surrounding large-scale production investments in the region due to new pipeline capacity and increasing demand for export capacity.

The updated forecast by S&P Global for Canadian oil sands production indicates a notable increase in future output. This suggests a bullish sentiment towards the oil sands sector's capacity for growth, despite potential regulatory headwinds. The focus on capital-efficient projects that improve asset optimization and efficiency can enhance productivity and profit margins. However, investors should monitor the evolving regulatory landscape, particularly the federal oil and gas emissions cap, which could introduce constraints and affect long-term project viability. Oil price volatility and export capacity challenges, such as the need for additional pipelines, add layers of risk which could impact the sector's ability to maintain competitive pricing and market access. As production nears the projected plateau towards the end of the decade, the industry's commitment to large-scale carbon capture initiatives could further complicate capital allocation decisions. The ability to navigate these complexities will be critical for sustained profitability and investor returns in this sector.

The report's mention of a production plateau due to the oil and gas emissions cap points to increasing environmental regulations as a significant influence on the industry's growth trajectory. The industry's investment in carbon capture and storage is an acknowledgment of the need to balance production with environmental responsibility. However, the effectiveness and scalability of these technologies in reducing overall emissions will be important in determining their impact on the industry's social license to operate and investor sentiment. The financial implications of adhering to stricter environmental policies must be weighed against the potential for reputational benefits and access to environmentally conscious capital, which are becoming increasingly important criteria for investment decisions.

Export capacity constraints, as highlighted in the S&P Global analysis, could become a bottleneck for the Canadian oil sands industry. The completion of the Trans Mountain pipeline expansion does not fully alleviate the potential for price volatility stemming from limited export avenues. Future demand for export capacity necessitates strategic infrastructure development to maintain market equilibrium and prevent supply gluts. The logistics of pipeline construction, both in terms of political and regulatory approval as well as physical execution, will be a determinant factor in the industry's ability to capitalize on production increases. Investors should consider the implications of infrastructure sufficiency on regional price differentials and the competitiveness of Canadian oil in global markets.

Latest forecast expects oil sands production in 2030 to be 3.8 million barrels per day—half a million barrels per day higher than current levels

CALGARY, AB, May 9, 2024 /PRNewswire/ -- S&P Global Commodity Insights has raised its 10-year oil sands production outlook for the second consecutive year. The updated forecast expects Canadian oil sands production to reach 3.8 million barrels per day (mbd) by 2030—half a million barrels per day higher than today. The new projection represents an increase of nearly 100,000 b/d (or 3%) in 2030 from the previous outlook. This also marks the first time S&P Global is making public its outlook to 2035 where initial declines in production begin to emerge.

The new forecast, produced by the S&P Global Commodity Insights Oil Sands Dialogue, attributes the increased projection to producers' ongoing focus on maximizing existing assets through investments in optimization and efficiency. Such projects tend to be more capital efficient, quicker to complete, and often contribute to greater reliability and lower cost as well as higher output.

"Oil sands production continues to grow despite concerns about the advancing federal oil gas emissions cap's potential impact on production," said Celina Hwang, Director, North American Crude Oil Markets, S&P Global Commodity Insights. "Producers have displayed a blend of discipline and adaptability with an ongoing focus on maximizing existing assets through optimization and efficiency while maintaining stronger balance sheets from comparatively higher oil prices."

Oil sands production has increased 1.3 million b/d during the past decade. An extended period of comparatively higher oil prices in recent years is leading to more ambitious projects, with several advancing with potential to increase output by more than 20,000 b/d each. These projects are still primarily focused on leveraging existing infrastructure rather than large greenfield projects, the analysis says.

Over the longer-term, headwinds do exist that contribute to a plateauing of oil sands production towards the end of the decade when the inventory of potential optimizations may slow and the uncertainty posed by the oil and gas emissions cap is expected to add additional hesitation to larger scale production-focused investments, the analysis says.

"The potential for further optimizations exists but they are not infinite. There is only so much that you can optimize, and those projects are often harder to foresee because many are the result of learning by doing," said Kevin Birn, Vice President, Canadian Oil Markets Chief Analyst and Head of Center for Emissions Excellence, S&P Global. "Large-scale carbon capture and storage, which the industry has committed to implementing, will also add complexity to larger investments in incremental production from a capital allocation and project execution standpoint."

Export capacity is expected to continue to present a challenge in the coming years. Despite the recent completion of the Trans Mountain pipeline expansion (TMX), regional price volatility could reemerge without new pipelines or further optimization of existing ones, the analysis says. S&P Global Commodity Insights balances indicate that additional export capacity may be needed online as soon as early 2026 to ensure that the system remains balanced on pipeline economics. 

"It has been clear from our analyses for some time that hopes for a new age of price stability in western Canada are unlikely to be achieved with TMX alone," said Birn. "Higher output has raised demand for export capacity, and new pipeline capacity is increasingly rare. That means additional uncertainty for large-scale production investments in the region."

Media Contacts:
S&P Global: Jeff Marn +1-202-463-8213,
S&P Global Commodity Insights, Global/EMEA: Paul Sandell + 44 (0)7816 180039,
Americas: Kathleen Tanzy + 1 917-331-4607,
Asia: Melissa Tan + 65-6597-6241,

About S&P Global Commodity Insights

At S&P Global Commodity Insights, our complete view of global energy and commodity markets enables our customers to make decisions with conviction and create long-term, sustainable value.

We're a trusted connector that brings together thought leaders, market participants, governments, and regulators and we create solutions that lead to progress. Vital to navigating commodity markets, our coverage includes oil and gas, power, chemicals, metals, agriculture, shipping and energy transition. Platts® products and services, including leading benchmark price assessments in the physical commodity markets, are offered through S&P Global Commodity Insights. S&P Global Commodity Insights maintains clear structural and operational separation between its price assessment activities and the other activities carried out by S&P Global Commodity Insights and the other business divisions of S&P Global.

S&P Global Commodity Insights is a division of S&P Global (NYSE: SPGI). S&P Global is the world's foremost provider of credit ratings, benchmarks, analytics and workflow solutions in the global capital, commodity and automotive markets. With every one of our offerings, we help many of the world's leading organizations navigate the economic landscape so they can plan for tomorrow, today. For more information visit


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SOURCE S&P Global Commodity Insights


What is the updated oil sands production outlook by S&P Global Commodity Insights?

S&P Global Commodity Insights projects Canadian oil sands production to reach 3.8 million barrels per day by 2030.

What factors contribute to the increased production projection?

Producers' focus on maximizing existing assets through efficiency and optimization projects is attributed to the higher output.

What are the challenges expected for oil sands production in the long term?

Export capacity constraints and uncertainties related to federal emission caps may impact the growth of oil sands production towards the end of the decade.

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