This article supplied by Troy Media.

 By Rashid Husain Syed

Low-cost oilsands give Canada a crucial edge as U.S. shale oil struggles with rising costs

While global oil markets have rebounded slightly on news of a U.S.-China trade truce, not all producers are equally positioned to benefit. In North America, the contrast is clear: Canada’s oil sector is built for stability, while the U.S. industry is showing signs of strain.

Canada’s oil production is dominated by the oilsands —capital intensive to build, but efficient and low-cost to maintain. Oil sands projects involve mining or steaming oil from sand-rich deposits and can produce for decades, unlike U.S. shale wells that decline rapidly and require constant reinvestment. This gives Canadian producers a structural edge during market downturns.

“The largest companies here in Canada … they have cost structures that are among the best in the world,” said Randy Ollenberger of BMO Capital Markets. “They can withstand WTI (West Texas Intermediate) prices in the range of US$40 and still have enough cash ow to maintain production.”

Mid-sized conventional producers in Canada often break even at US$50 to US$55 per barrel. Major players like Canadian Natural Resources can operate sustainably in the low-to-mid-US$40 range. A break-even price is the minimum oil price needed to cover production costs and avoid operating at a loss.

“We’re not planning on shutting any rigs down or changing our plans, yet,” said Brian Schmidt, CEO of Tamarack Valley Energy. “And it largely is
because our company can tolerate, and is quite profitable, at low prices.” He added: “I think we had already, even before the downturn, put ourselves into a defensive position.”

The data supports that confidence. According to Statistics Canada, 2024 was a record year: crude oil and equivalent output rose 4.3 per cent to 298.8 million cubic metres (about 1.88 billion barrels); exports increased five per cent to 240.4 million cubic metres; and shipments to non-U.S. markets jumped nearly 60 per cent, aided by the completion of the Trans Mountain pipeline expansion.

Nearly 89 per cent of Canada’s oil exports still flow to the United States, but structurally, the two industries are diverging fast.

In the U.S., the shale-driven oil boom is losing steam. Production dropped from a record 13.465 million barrels per day in December 2024 to 13.367 million, according to the U.S. Energy Information Administration.

Industry leaders are warning of a turning point.

“It is likely that U.S. onshore oil production has peaked and will begin to decline this quarter,” said Travis Stice, CEO of Diamondback Energy, the largest independent producer in the Permian Basin. The company is “dropping three rigs and one crew this quarter.”

ConocoPhillips, another major player, is also pulling back. It reduced its capital budget to between US$12.3 billion and US$12.6 billion—down from US$12.9 billion—citing “economic volatility.” Rig counts are falling as well, according to oilfield services company Baker Hughes.

The core challenge is cost. A Federal Reserve Bank of Dallas survey found that Texas producers’ average break-even price is around US$65, the cost to drill replacement wells ranges from US$50 to US$65, and growth drilling requires prices between US$78 and US$85.

Even after the recent rebound—sparked by the May 12 U.S.-China trade truce—West Texas Intermediate sits at around US$63.07, below what many U.S. firms need to expand operations.

Shale’s short life cycles, higher reinvestment demands and rising capital discipline are colliding with lower prices. The U.S. sector is being forced to slow down.

Canada’s oil sector isn’t just surviving—it’s adapting and growing in a volatile market. With lower ongoing costs, long-life assets and increased export flexibility, Canadian producers are proving more resilient than their American peers.

With tens of thousands of jobs across Canada tied to the oilpatch, the sector’s ability to remain profitable through downturns is critical to Canada’s economy,  government revenues and energy security.

In a world of unpredictable oil prices, Canada is playing the long game—and winning.

Toronto-based Rashid Husain Syed is a highly regarded analyst specializing in energy and politics, particularly in the Middle East. In addition to his contributions to local and international newspapers, Rashid frequently lends his expertise as a speaker at global conferences. Organizations such as the Department of Energy in Washington and the International Energy Agency in Paris have sought his insights on global energy matters.

Troy Media empowers Canadian community news outlets by providing independent, insightful analysis and commentary. Our mission is to support local media in helping Canadians stay informed and engaged by delivering reliable content that strengthens community connections and deepens understanding across the country.

MxM News

Quick Hit:

A shocking new poll reveals that a staggering 71% of likely Democratic voters support imprisoning Elon Musk for his brief service in the Trump administration’s Department of Government Efficiency (DOGE). The survey, conducted by The Heartland Institute and Rasmussen Reports, underscores an alarming shift in progressive politics: jailing political opponents for attempting to rein in bureaucratic waste. As Justin Haskins writes in his May 9 Townhall op-ed, this poll is not just about Musk—it’s about the dangerous normalization of authoritarianism among America’s political left.

Key Details:

• 71% of likely Democratic voters support jailing Musk for his role in eliminating government waste via DOGE.

• 80% of ideological liberals, across parties, say they would imprison Musk for his public service.

• Nearly 70% of Democrats support banning Musk from ever serving in government again—an unconstitutional measure.

Diving Deeper:

In his recent Townhall column, Justin Haskins warns that Elon Musk’s fall from liberal darling to “Public Enemy No. 1 for the modern left” stems from a single transgression: daring to challenge the D.C. establishment. Haskins opens by recognizing Musk’s past achievements—electric vehicles, space exploration, and defending free speech. But after briefly working in the Trump administration’s Department of Government Efficiency (DOGE)—an initiative aimed at cutting federal waste—Musk became a target of left-wing ire.

According to the Heartland Institute/Rasmussen poll, “Seven in ten likely Democratic voters want to imprison Musk for trying to make government more efficient.” Haskins adds, “This isn’t satire. This is the modern Democratic Party, where liberalism has evolved into authoritarianism dressed in the clothes of compassion and equity.”

The numbers become even more disturbing among self-identified liberals. A staggering 80% of ideological liberals said they’d support jailing Musk for participating in DOGE. Additionally, nearly 70% of Democrats back a proposal to ban him from ever working in government again—a position that clearly violates constitutional protections.

Musk’s unpopularity among Democrats has grown since his acquisition of X (formerly Twitter) and his commitment to restoring banned voices. Once celebrated as a climate champion, Musk is now demonized by the very groups that once hailed his green energy innovations. “He was supposed to walk in lockstep against conservatives at all times,” Haskins notes. “When he chose a different path… he committed a sin that some on the radical left simply cannot forgive.”

More importantly, the poll reflects a dangerous national trend: criminalizing political dissent. Haskins writes, “When nearly three-fourths of Democratic voters support jailing someone for participating in an effort to streamline federal agencies, we’ve crossed a dangerous line.” He continues, “This is the stuff of banana republics, not constitutional republics.”

The column concludes with a chilling reminder that the targeting of Elon Musk is not an isolated incident. “If they’re willing to jail Elon Musk for doing his job, what do you think they’ll do to the rest of us?” Haskins asks. The poll results reveal a left-wing movement increasingly comfortable using state power to punish those who refuse to conform.