Canada Worries Trump Could Strike Back After Alberta Cut Oil Production

Chris White | Energy Reporter

A former Alberta trade envoy to the U.S. worries President Donald Trump could retaliate against Canada after Alberta chose to cut oil production.

Trump is known to call out energy-producing countries that reduce production – he frequently criticizes Saudi Arabia for considering similar cuts. Alberta, which exports most of its oil to the U.S., moved Tuesday to slash 325,000 barrels per day until supply becomes less glutted.

Gary Mar, Alberta’s representative in the U.S. capital for four years, worries the province’s decision could end poorly. “The president of the United States obviously is very keen on his America First policy … We don’t know what he’s going to do,” Mar told local reporters Wednesday.

Cutting oil production to raise prices might seem nice on paper, he noted, but the gamble could come with a punch. “We could be in for some type of countermeasure against our increased price,” said Mar, who now serves as the president of the Petroleum Services Association of Canada (PSAC).

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WASHINGTON, DC – OCTOBER 26: U.S. President Donald Trump addresses young black conservative leaders from across the country as part of the 2018 Young Black Leadership Summit at White House on October 26, 2018 in Washington, DC. (Photo by Pete Marovich/Getty Images)

Crude prices plummeted after production growth and pipeline bottlenecks contributed to a costly oil glut. The price of Western Canadian Select heavy oil ticked upward to $8.02 US to $29.95 a barrel, narrowing a gap in prices between the U.S. and Canada.

Carlo Dade, an expert on Canada-U.S. trade who’s with the Canada West Foundation, believes Trump probably won’t retaliate. The U.S. is swimming in oil and the president is often preoccupied with other issues, but it’s possible Trump could pull out a wild card, Dade told reporters.

“What would have been a no-brainer not to worry about under Obama or any of the Bushes is something that we do have to keep in the back of our minds,” he said. The U.S. president is known for retaliating against the Organization of Petroleum Exporting Countries for perceived threats of crude cuts.

The Department of Justice (DOJ) is reviewing legislation authorizing the U.S. attorney general to sue OPEC for artificially raising oil and gas prices. Both houses of Congress have approved versions of a bill allowing the Trump administration to build a case against the cartel.

Prices have been falling since November, when the national average price of gasoline fell to $2.61, which is about eight cents higher than 2017’s average for this time. (RELATED: Trump To Expand Drilling On Alaskan Lands Put Under Lock And Key By Obama)

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