The OPEC-Russia oil deal, announced on December 10, 2016, has renewed the threat posed by Canadian oil sands to the global oil market. The deal, which was brokered between the Organization of the Petroleum Exporting Countries (OPEC) and Russia, calls for both countries to cut their oil production by 1.2 million barrels per day (bpd) in an effort to reduce global oil inventories and boost prices. This deal has put further pressure on Canadian oil sands, which are already struggling due to low global oil prices.
Canadian oil sands are a form of unconventional oil, which is more expensive to produce than conventional oil. Oil sands are located in the provinces of Alberta and Saskatchewan, and account for about two-thirds of Canada’s total oil production. The oil sands are attractive to producers because they are relatively easy to access and require less capital investment than other forms of oil production. However, the cost of production is still higher than conventional oil, and this has made Canadian oil sands less competitive in the current low-price environment.
The OPEC-Russia deal has only exacerbated this problem, as it has further reduced the global supply of oil and put further downward pressure on prices. This has made it even harder for Canadian oil sands producers to compete in the global market. The situation is further complicated by the fact that Canadian oil sands are not as easily exported as conventional oil, due to their higher transportation costs. This means that Canadian producers are even more vulnerable to the low prices caused by the OPEC-Russia deal.
The situation has been further complicated by the fact that the Canadian government has recently implemented a carbon tax, which has raised the cost of production for oil sands producers. This has made it even harder for Canadian producers to compete in the global market. The situation has put Canadian oil sands producers in a difficult position. They are facing increased competition from OPEC and Russia, as well as higher costs due to the carbon tax. This has made it difficult for them to remain competitive in the global market. However, some analysts believe that the situation may improve in the future, as the OPEC-Russia deal is set to expire in 2018. If oil prices increase as a result of the deal, it could make Canadian oil sands more competitive in the global market.
In the meantime, Canadian oil sands producers are likely to struggle in the current market. The OPEC-Russia deal has renewed the threat posed by Canadian oil sands to the global oil market, and it remains to be seen how the situation will develop in the future.