The tariff on Canadian oil may be hard for most consumers to avoid

Tariffs on Canadian and Mexican imports went into effect this week, including a 10% tariff on Canadian oil. While U.S. consumers don’t purchase crude oil, U.S. refineries do and the tariff is likely to result in higher prices at the gas pump.

According to Patrick DeHaan, head of Petroleum Analysis at GasBuddy, the tariffs will be felt more in some areas of the country than others. Some of the biggest price increases will occur in the Northeast, in areas like Maine, Rhode Island, Connecticut, Vermont, New Hampshire, Massachusetts, and Upstate New York.

“If you’re filling up in the Northeast, you’ll see price increases first and more significantly, as a significant portion of this region’s fuel comes directly from the Irving Oil refinery in Saint John, New Brunswick, Canada,” DeHaan wrote in the GasBuddy blog. 

“The refined products crossing the border would immediately incur the tariff costs. By mid-March 2025, the Northeast could expect fuel prices—including gasoline, diesel, and other petroleum products—to be 20 to 40 cents per gallon higher. For a typical 15-gallon fill-up, that’s an additional $3-$6 every time you visit the pump.”

But other regions that purchase gasoline from American refineries will also feel the sting of the Canadian tariff. That’s because American refineries depend on Canadian crude, not the very abundant U.S.-produced crude oil.

Dependent on Canadian crude

“Our pipeline infrastructure simply isn’t designed to accommodate such a dramatic shift,” DeHaan said. “The network that currently serves refineries across the Midwest, Great Lakes, and Rockies was specifically constructed to deliver Canadian heavy crude, and these pipelines only flow in one direction – south.

“To transport substantial quantities of U.S. crude – primarily from the Permian Basin in Texas or the Bakken in North Dakota – to these northern refineries would require entirely new pipeline configurations or reversing existing flows. That’s not happening overnight. We’re talking years of planning, billions in investment, and navigating complex regulations.”

DeHaan said the Canadian oil tariff would likely raise gas prices, to some extent, in the Midwest, Mountain West, Great Lakes region while the Southeast, Mid-Atlantic and West Coast may see only slight increases.