U.S. President Donald Trump has hinted at the potential revival of the Keystone XL oil pipeline project between Canada and the U.S. under a new trade deal. However, industry experts believe that the statement may be more politically motivated than driven by the need for petroleum.
In a recent social media post, Trump announced a temporary halt on new tariffs on Canadian goods, claiming a “deal” with Canada. He mentioned the resurrection of the Keystone XL Pipeline, previously terminated by President Biden, as a possibility.
Former executive Dennis McConaghy of TransCanada Corporation, now TC Energy, suggested that Trump’s interest in Keystone XL could influence upcoming trade negotiations between the two nations. Since imposing tariffs on Canadian goods in 2025, Trump has repeatedly expressed a lack of necessity for Canadian products, despite exempting key commodities like oil from tariffs.
Carlo Dade from the University of Calgary cautioned against premature excitement over the project’s revival, citing potential political and environmental obstacles. Valérie Beaudoin of the Advisory Committee on Canada-U.S. Economic Relations highlighted the complexities Carney may face compared to Trump in advancing Keystone XL.
South Bow Corp., the operator of the Keystone Pipeline System, which delivers oil to U.S. markets, did not comment on the potential project revival. The Keystone XL extension faced challenges and was shelved after opposition from previous administrations. Trump’s administration took steps to revive parts of the project upon his return to office.
Additionally, South Bow is collaborating with Bridger Pipeline on the Prairie Connector project, utilizing sections of the Keystone XL pipeline. If completed, the Prairie Connector project could significantly boost Canada’s oil exports to the U.S. South Bow has received commitments for transportation services and is considering the project’s viability.
CEO Bevin Wirzba emphasized the sustained demand for Canadian crude in the U.S. refining market. Despite global oil trade disruptions, South Bow remains optimistic about the project’s potential and the long-term demand for Canadian oil in the Gulf Coast refining market.