Wildfires in Alberta’s oil country have shut in 344,000 barrels per day of production, according to Natural News. That is 7% of everything Canada pumps. The bottom line: producers are fighting fire on one flank and Washington’s sanctions on another.
By the numbers, the fires are close to another 470,000 barrels per day of capacity. Cenovus, MEG Energy and Canadian Natural all face disruption as the blazes edge toward their sites, and the outlook is volatile. Analysts quoted in the report warn of lasting damage or shutdowns that stretch for months.
The figure that matters for American drivers is 60%. That is the share of crude U.S. refineries draw from Canada, so a prolonged outage could force them to pay sharply more for replacement barrels. Analysts also point to tight supply worldwide, with the Alberta losses resembling the effect of sanctions on producers elsewhere.
Shell’s upgrader adds to the strain
Shell declared force majeure at its Scotford upgrader in Alberta, a 300,000 barrel per day plant, after a unit tripped. Scotford turns oil sands bitumen into light synthetic crude. It was due to begin a 65-day maintenance turnaround this month anyway. Two trading sources told the outlet Shell had cut deliveries by approximately 20%.
A cobalt refinery goes dark
The second hit comes from policy. Sherritt International has started shutting its Fort Saskatchewan refinery, near Edmonton, after the expanded U.S. sanctions on Cuba cut off the feedstock it runs on. The Toronto-based company had earlier said the plant would operate only until mid-June, on existing inventory.
Sherritt mined nickel and cobalt at its Moa joint venture in eastern Cuba and refined the material in Alberta. The refinery will sit idle until Moa mining and processing restart and the feed pipeline is rebuilt, and the company says it cannot say when that will be. It keeps a crew on site to hold the plant in a safe, secure state, is conserving cash and is preparing for an eventual restart. Fertilizer and sulphuric acid sales for resale continue to bring in revenue. The company has been under growing financial and operational pressure since the U.S. widened its Cuba sanctions in May, and it has suspended its direct participation in the Cuban venture.
The report describes the plant as Canada’s only cobalt refinery.
Analysts told the outlet that consumers could see higher gasoline prices and costlier batteries and electronics. Investors will be watching two things: whether the fires force further production cuts, and whether Sherritt can restart once the Cuba situation changes.
Sources
- Alberta Wildfires & U.S. Sanctions Deliver One-Two Punch to Canadian Energy | SHTF Plan
- Alberta wildfires and U.S. sanctions deliver one-two punch to Canadian energy and critical minerals sector â NaturalNews.com
