U.S. President Donald Trump has suggested the potential revival of the Canada-U.S. Keystone XL oil pipeline project, which had been previously shelved by past administrations. While Trump’s announcement on social media hinted at a new agreement with Canada and a temporary halt on tariffs, industry experts view this move as more politically motivated than focused on the energy sector.
Former executive Dennis McConaghy and other specialists believe that Trump’s mention of the Keystone XL pipeline in the context of the trade deal negotiations may influence Prime Minister Mark Carney’s decisions. Since imposing tariffs on Canadian goods in early 2025, Trump has maintained a stance of not requiring Canadian exports, despite certain exemptions for items like oil and minerals.
Carlo Dade from the University of Calgary pointed out that reviving the Keystone XL project could face challenges considering the current political and environmental landscape. Valérie Beaudoin, part of the Advisory Committee on Canada-U.S. Economic Relations, noted that the decision to proceed with Keystone XL would be easier for Carney than for Trump, given the potential uncertainties with future administrations.
The Keystone Pipeline System, operated by South Bow Corp., plays a critical role in transporting Canadian and U.S. crude oil to refining markets in the U.S. Despite Trump’s indication of the project’s revival, concerns remain about the project’s feasibility and market dynamics compared to its initial proposal.
South Bow’s involvement in the Prairie Connector project, a potential expansion of the Keystone XL pipeline, could significantly boost Canada’s crude oil exports to the U.S. Former TransCanada executive McConaghy highlighted the value this project could bring, emphasizing the long-term demand for Canadian crude in the U.S. market.
As discussions around the Keystone XL project continue, the energy sector awaits further developments on the potential resuscitation of this controversial pipeline.