Canada wildfires jeopardize oil production, threatening higher prices – The Average Joe

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    Canada wildfires jeopardize oil production, threatening higher prices

    Noah Weidner

    May 17, 2024

    If you thought Europe’s and the Middle East’s geopolitical issues were the only wild cards on your 2024 bingo, Canada would like a word. Western Canada is again on fire, battling over 100 wildfires thickening the air over North America. But a massive, uncontrolled blaze in Alberta threatens to endanger oil production in the world’s fourth-largest oil-producing country.

    • Up to 80% of Canada’s oil, about 3.2M barrels a day, comes from the oil sands region — which could be affected or even shut down by a nearby wildfire.
    • Energy consultancy Rystad warns that if the fires “materially worsen,” up to 2.1M barrels of daily output could be at risk, potentially taking more than 65% offline.

    Bad for business: These fires could shake an already unstable oil market. Even if production isn’t halted, evacuations might impact Canada’s 6% share of global oil production. This could lead to higher prices in the US, Canada’s biggest oil buyer. While North America has managed to shield itself from the worst of the global crises with strong domestic production, Canada’s wildfires may have found their match.

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