What Would Happen If Canada Stopped Supplying Energy to the U.S.? Oil, Gas and Power Ties Run Deep

September 23, 2026 — Canada possesses significant energy leverage in its trade relationship with the United States, but Prime Minister Mark Carney has resisted calls to restrict exports, emphasizing Canada’s reputation as a reliable supplier.

Canada cutting energy supplies to the United States would immediately disrupt one of the world’s most deeply integrated energy relationships, particularly affecting oil refineries, natural-gas networks and regional electricity markets.

The scenario has received renewed attention during U.S.-Canada trade tensions, with some Canadian politicians suggesting energy exports could provide Ottawa with leverage against tariffs imposed by President Donald Trump’s administration.

Prime Minister Mark Carney, however, has pushed back against deliberately restricting supplies, saying Canada’s credibility as a dependable provider of essential commodities could suffer if energy became a negotiating weapon.

“Being a reliable supplier is important,” Carney said in July when reporters asked whether Ottawa should restrict energy flows, adding that governments should think carefully before cutting customers off.

The scale of the relationship is substantial. U.S.-Canada energy trade was worth an estimated $137 billion in 2025, with approximately $111 billion consisting of American imports from Canada.

Crude oil represents the largest part of that trade. U.S. imports of Canadian crude averaged roughly 3.9 million barrels per day in 2025, making Canada America’s largest foreign oil supplier.

A sudden interruption would be particularly important for refineries in the Midwest, many of which were designed to process the heavy crude produced by Canada’s oil sands rather than lighter domestic grades.

Those refineries could seek replacement barrels from elsewhere, but transportation constraints, crude-quality differences and pipeline configurations mean substitution would not necessarily occur quickly or at the same cost.

That could create upward pressure on regional refinery costs and potentially gasoline, diesel and jet-fuel prices, although the precise effect would depend heavily on duration, inventories and global oil conditions.

Natural gas represents another major connection. American pipeline imports from Canada averaged 8.6 billion cubic feet per day in 2025, flowing primarily into western and central portions of the United States.

The United States is itself a major natural-gas producer and increasingly large LNG exporter, meaning losing Canadian gas would not automatically create a nationwide shortage, but some regions could face tighter supplies.

U.S. LNG exports reached about 17.4 billion cubic feet per day during the first half of 2026, illustrating America’s substantial domestic production capacity and ability to participate heavily in global markets.

Electricity is smaller economically but can be more sensitive locally. U.S.-Canada electricity trade totaled approximately $3.2 billion in 2025, with American imports accounting for about two-thirds of that value.

Canadian hydropower flows into northern U.S. markets through interconnected grids, and a new transmission line that began operating in January 2026 has increased potential capacity for additional Canadian electricity imports.

A complete electricity cutoff would therefore affect certain border regions much more severely than the country overall, potentially requiring utilities to activate alternative generation or purchase power from more expensive sources.

Canada would also face significant economic consequences from any prolonged cutoff because American customers remain extraordinarily important purchasers of Canadian oil, gas and other energy commodities transported through established cross-border infrastructure.

Ottawa has been working to reduce that dependence. Expanded use of the Trans Mountain pipeline has allowed more Canadian crude to reach Pacific ports and increasingly serve customers in Asia.

Carney’s government is also promoting new pipelines, LNG facilities, electricity infrastructure and international trade corridors as part of a broader strategy to make Canada less dependent on any single export market.

Canadian leaders remain divided over using existing exports politically. Ontario Premier Doug Ford has advocated stronger energy leverage, while Alberta Premier Danielle Smith has warned that restricting oil exports could seriously damage Canadians themselves.

For now, Canada is not planning to stop supplying energy to the United States. The debate instead illustrates how decades of shared pipelines and power grids have made economic disruption potentially costly for both countries.

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