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Saudi Arabian oil imports in Canada have been steadily increasing for years. National Energy Board data show the kingdom shipped an average of 102,000 barrels of oil per day to Canada last year, which was also up 17 per cent from an average of close to 87,000 bpd in 2016.

It has consistently been among the five largest sources of foreign oil for Eastern Canadian refineries in recent years and an important feedstock for refineries in Quebec, New Brunswick and Newfoundland.

If the Saudi government’s threat includes oil market transactions with private-sector companies in Canada, the effects would be damaging for the country’s refining sector, ARC Energy Research Institute executive director Peter Tertzakian said.

“We are in a world where 100,000 barrels per day is significant,” Tertzakian said, adding that oil markets are currently tight and only a few producing countries – including Saudi Arabia – have spare capacity.

As a result, he said that Canadian refineries would be challenged to replace 100,000 bpd of oil supply without incurring significant additional costs.

“The challenge right now is a lot of the world’s oil supply is starting to max out,” Tertzakian said, citing problems in a handful of oil exporting countries, such as Libya, Nigeria and Iran, which has caused a restriction in global oil supply.

In addition, there are no pipelines connecting Canadian oil production with Quebec or Atlantic refineries so if domestic oil companies wanted to take advantage of Saudi Arabia’s share of that market, they would need to ship the product eastbound on a railway cars.