The federal government says it hasn’t enacted any policies to release the 23.6 million barrels of oil it had committed to as part of a multi-country effort to bring down fuel prices amid the Iran war.
Energy Minister Tim Hodgson said “regular commercial mechanisms” would be used to produce and export the extra oil but the government would not use “any legislative, regulatory or policy instruments to contribute to this collective action.” He made the comments in a June 5 response to an order paper question submitted by Conservative MP Michael Kram.
Hodgson had announced on March 13 that Canada would release 23.6 million barrels to support the efforts, and that the oil would be “produced by our industry and co-ordinated with the federal and provincial governments.”
The latest Statistics Canada data, released on June 30, indicated that Canadian exports of crude oil fell from 141 million barrels in March to 136 million in April.
On March 11, less than two weeks after Iran closed the Strait of Hormuz and prevented the export of over 10 million barrels a day of oil from the region, the International Energy Agency (IEA) announced that 32 countries had agreed to release 400 million barrels of oil. This release—the largest in history—was meant to drive down rising oil prices.
As an oil-exporting nation, Canada is exempt from the IEA’s requirement to hold a dedicated oil stockpile. Canada is the only G7 nation that does not have a strategic oil stockpile that can be released into international oil markets to lower oil prices.
Conservative MP Carol Anstey, who serves as her party’s shadow energy minister, said in a July 6 statement that the government had “lied” about releasing oil supplies, and actually exported 5 million fewer barrels the month after Hodgson’s announcement.
Anstey said Canada should be helping to stabilize oil markets, but the federal government was “failing to live up to our promise on ‘increasing crude oil production.’”
The Conservative Party previously called for the Liberals to respond to the oil crisis by repealing the Impact Assessment Act, oil tanker moratorium, and industrial carbon tax, as well as pre-approving liquefied natural gas plant sites on the East Coast, and guaranteeing timelines of under six months to approve major energy infrastructure projects.
Iran’s closure of the Strait of Hormuz caused the price of West Texas Intermediate to surge from US$60 to over US$110, but a ceasefire between Iran and the United States and peace negotiations allowed prices to fall back below US$70. The two countries have traded strikes repeatedly since the ceasefire began, and traffic through the waterway has not yet returned to its pre-war volume.
