Canada Oil And Gas Market Size & Share Analysis - Growth Trends And Forecast (2025 - 2030)

Canada Oil And Gas Market Trends and Insights

Record-high Oil-sands Throughput

Oil-sands output climbed to 1.58 million BOE/d at Canadian Natural Resources and 853,000 bbl/d at Suncor in Q1 2025, reinforcing Alberta’s 58% share of national crude volumes.^{(1)Government of Canada, “Deputy Prime Minister Welcomes $2 Billion Partnership Between Canada Growth Fund and Strathcona Resources,” canada.ca} Facility debottlenecking and solvent-assisted extraction technology are driving higher recoveries, widening cash margins as the Canadian oil and gas market taps resilient global demand for secure supply. Additional brownfield debottlenecking projects are scheduled through 2030, enhancing long-term baseline production without incurring extensive risks associated with greenfield investments.

Trans Mountain (TMX) Export Capacity Uplift

The TMX expansion tripled capacity to 890,000 bbl/d and shrank the WCS-WTI differential below USD 13/bbl, lifting producer netbacks and enhancing the Canada oil and gas market’s pricing power.^{(2)Suncor Energy Inc., “Suncor Energy Reports First Quarter 2025 Results,” suncor.com} Early volumes are being shipped to Asia-Pacific refiners via the Westridge terminal, validating the strategic diversification away from U.S. mid-continent refineries. Forward curves indicate sustained basis tightening, driving capital reallocation toward higher-margin oil-sands expansions that are already underway.

LNG Canada Start-up & Western Gas Re-rating

The commissioning of LNG Canada's 14 mtpa Phase 1 in 2025 marks a long-sought egress for western gas, ending the chronic AECO discounting that has weighed on the Canadian oil and gas market.^{(3)Offshore Technology, “LNG Canada Development Running on Schedule,” offshore-technology.com} Tourmaline expects a Q4 2025 price uplift linked to first cargos, and parallel projects such as Cedar LNG and the USD 1 billion Yellowhead Mainline pipeline are designed to triple LNG export capacity by 2030. Gas-focused producers are recalibrating their drilling programs to focus on British Columbia's liquids-rich acreage, which offers favourable netbacks.

Clean-economy Investment-tax-credits for CCUS

Investment tax credits covering up to 60% of eligible CCUS outlays have unlocked USD 1 billion in Growth Fund commitments to Strathcona Resources and CAD 24.5 billion in oil-sands alliance spending through 2030. The incentives enhance project economics, enabling companies to decarbonize while maintaining throughput, a balancing act crucial to the competitiveness of the Canadian oil and gas market.

Federal Emissions-cap Uncertainty

A pending federal cap, lacking defined compliance rules, has delayed some long-cycle capital commitments, even as 2024 capital expenditures (capex) reached USD 40.6 billion. Oil-sands operators must plan multi-decade payback periods, making regulatory clarity pivotal. Industry groups advocate harmonized policy signals to preserve the competitiveness of the Canada oil and gas market without derailing net-zero pathways.

Post-2028 Pipeline Egress Constraints

IEA projections of 680,000 bbl/d incremental Canadian crude by 2030 could outperform current spare capacity, recreating historical egress bottlenecks. While a new Pacific-route pipeline has gained “national interest” status, permitting milestones still risk slippage and could widen differentials again, pressuring realized prices in the Canada oil and gas market past 2026.

Segment Analysis

By Sector: Upstream Dominance Drives Production Growth

Upstream activities accounted for 72.6% of Canada's oil and gas market size in 2024, as operators favored brownfield expansions over frontier exploration. The segment's 3.4% CAGR through 2030 reflects the rising throughput of oil-sands and Montney gas developments, which keep the Canadian oil and gas market on a steady production trajectory. Midstream revenues are increasing due to toll growth, yet capital allocation remains disciplined following the TMX and LNG Canada build-outs, ensuring returns remain accretive.

Technologies such as horizontal drilling, solvent-aided extraction, and AI-enabled maintenance have significantly improved recovery factors, underpinning USD-denominated cash flows that ensure upstream leadership within the Canadian oil and gas market. Downstream players are pivoting to renewable diesel, as illustrated by Imperial Oil's new complex, slated for completion in mid-2025, which demonstrates adaptation to low-carbon fuel regulations while leveraging integrated supply chains.

Note: Segment shares of all individual segments available upon report purchase

By Location: Onshore Operations Maintain Market Leadership

Onshore production retained a 65.1% slice of Canada's oil and gas market share in 2024, thanks to well-established infrastructure across Alberta, Saskatchewan, and British Columbia. Continuous infill drilling and steam-to-solvent pilots in oil-sands mining projects prolong plateau output and sustain margin visibility.

Offshore assets, notably the West White Rose extension, deliver a 5.2% CAGR to 2030, outpacing mature onshore fields on a percentage basis. Improved rig automation, ice-resistant platform design, and supportive royalty frameworks have reinvigorated Atlantic Canada prospects, bringing geographic diversification to the Canada oil and gas market without eroding onshore dominance.

By Service: Decommissioning Gains Momentum

Construction services continued to lead in 2024, accounting for 52.5% of total service revenue as crews completed large-scale projects, such as the Trans Mountain Expansion, and prepared LNG Canada for its first gas. Yet the fastest-growing sector is decommissioning, which is expanding at a 6.5% CAGR through 2030 as stricter rules and corporate climate targets prompt operators to clear legacy wells and restore aging facilities. The change signals a maturing sector that now treats site cleanup as a core line item rather than a box-ticking exercise. Large producers are setting the tone: Cenovus alone plans to retire 3,000 wells by 2025, dedicating meaningful capital to abandonment, remediation, and surface reclamation programs.

Maintenance and turnaround work provides steady demand, centering on asset integrity and day-to-day reliability across Canada’s vast network of plants, pipelines, and terminals. The segment is modernizing rapidly, with operators rolling out AI-driven predictive systems that reduce downtime and lower safety risks; field trials have cut energy use by 37% and increased oil output by 14%.^{(4)PTAC, “Digital Innovation in the Energy Industry,” ptac.org} As growth spending eases, service providers are sharpening capabilities in carbon-capture construction and advanced decommissioning to meet evolving rules, illustrating how the business is shifting from pure expansion to disciplined stewardship.

Note: Segment shares of all individual segments available upon report purchase

Geography Analysis

Western Canada accounted for 82.7% of national output in 2024, anchored by the Western Canadian Sedimentary Basin’s prolific oil-sands and liquids-rich gas deposits. Alberta’s infrastructure base, recently augmented by TMX, connects seamlessly to tidewater, raising Asia-bound exports and fortifying the Canada oil and gas market against North American bottlenecks.

British Columbia is transitioning from a transit jurisdiction to a value-adding hub as LNG Canada commences operations in 2025. The Cedar LNG partnership enhances Indigenous participation, while the planned Yellowhead Mainline pipeline ensures sustained feedstock availability for coastal liquefaction, thereby strengthening the province’s strategic position within the Canadian oil and gas market.

Atlantic Canada contributes modest volumes today but commands outsized growth potential through West White Rose’s 2026 start-up, injecting regional diversity. Saskatchewan’s light-oil belts and potash synergies provide incremental production and midstream tie-ins, keeping the province integral to future expansion pathways. National policy encourages inter-provincial collaboration, recognizing that diversified export corridors elevate the overall resilience of the Canada oil and gas market.