U.S. President Donald Trump has hinted at the possibility of reviving the Keystone XL oil pipeline project, which was previously scrapped by former administrations. This suggestion came in light of a new trade agreement between the U.S. and Canada. However, industry experts believe that Trump’s remarks may be more politically driven than related to the oil industry.
Trump made the announcement on social media just before new tariffs on Canadian goods were set to take effect, indicating a “deal” with Canada and a temporary suspension of tariffs. The President referenced his predecessor, Joe Biden, in his post, suggesting a potential revival of the Keystone XL Pipeline.
Former executive Dennis McConaghy of TC Energy noted that Trump’s signal about the pipeline could impact the ongoing trade negotiations between the two countries. Since imposing tariffs on Canadian goods in 2025, Trump has been vocal about the U.S. not needing Canadian products, although certain items like oil have been exempt.
Despite Trump’s optimism, experts like Carlo Dade from the University of Calgary caution that reviving the Keystone XL project would face challenges, especially with potential future changes in administration. The project’s resurrection could also face environmental and political obstacles.
Valérie Beaudoin, from the Advisory Committee on Canada-U.S. Economic Relations, believes that approving Keystone XL may be easier for Canada than for the U.S. Commodity Context founder Rory Johnston emphasized that bringing back the pipeline would be unexpected and might not align with current market conditions.
South Bow Corp., the company behind the Keystone Pipeline System, did not comment on Trump’s remarks. The Keystone XL project, initially proposed in 2008, faced opposition and was ultimately abandoned before Trump took office. However, Trump has since taken steps to revive parts of the project.
Despite the potential revival of Keystone XL, Canada has diversified its oil export markets, with the Trans Mountain pipeline now shipping to non-U.S. destinations. South Bow is currently collaborating with Bridger Pipeline on the Prairie Connector project, which aims to utilize parts of the Keystone XL pipeline for increased crude oil exports to the U.S.
The Prairie Connector project, if realized, could significantly boost Canada’s oil exports. South Bow CEO Bevin Wirzba has highlighted the strong demand for Canadian crude in the U.S. market. The company has secured commitments from multiple customers for transportation services, but a final investment decision on the project is pending.
As global crude oil trade faces disruptions, South Bow sees a growing need for connectivity to refining and export markets. The company remains optimistic about the long-term demand for Canadian crude in the Gulf Coast refining sector.