Beyond Tariffs: US Refineries and the Continued Reliance on Canadian Crude

For updates, visit the GasBuddy blog as the situation remains fluid

What You Need to Know

• Trump’s 10% tariff on Canadian energy went into effect at midnight on March 4.

• Some U.S. regions will see price impacts rather quickly, while others will see a delay of 1-3 weeks.

• Fuel prices will rise in varying amounts across different U.S. regions, with the Northeast expected to see the most significant increase at around 20-40 cents per gallon by mid-March.

• Refined products like gasoline, diesel, heating oil, propane, jet fuel and more will be impacted.

• U.S. refineries can’t simply switch from processing Canadian to American crude oil due to specialized equipment, infrastructure, and pipeline configuration that has been built up over the last 50 years.

• Long-term, the tariff will add costs throughout the entire supply and refining system, ultimately passing costs to consumers in the form of higher fuel prices.

For all late-breaking analysis, visit our blog directly: https://www.gasbuddy.com/go/canadian-oil-tariff-impact-gas-prices

Trump’s 10% tariff on Canadian oil goes into effect today. This has prompted many to ask an apparently simple question: “Why can’t U.S. refiners just use American oil instead?” As is often the case with energy policy, what seems straightforward on the surface is anything but.

Let me break down why this isn’t as simple as flipping a switch from “Canadian” to “American” crude oil, and what it means for your wallet at the pump.

Infrastructure Isn’t Built for It

Our pipeline infrastructure simply isn’t designed to accommodate such a dramatic shift. The network that currently serves refineries across the Midwest, Great Lakes, and Rockies was specifically constructed to deliver Canadian heavy crude, and these pipelines only flow in one direction—south.

To transport substantial quantities of U.S. crude (primarily from the Permian Basin in Texas or the Bakken in North Dakota) to these northern refineries would require entirely new pipeline configurations or reversing existing flows. That’s not happening overnight. We’re talking years of planning, billions in investment, and navigating complex regulations.

Not All Crude Is Created Equal

U.S. refiners that currently process Canadian crude can’t simply swap for domestic. It’s like asking someone with a diesel truck to suddenly fill up with regular gasoline.

Refineries in these regions were specifically designed and optimized to process heavy sour crude from Canada. These facilities have invested billions in specialized equipment like cokers and hydrocrackers that break down heavier oils. Light sweet crude from the U.S. requires completely different processing equipment and results in different product outputs.

Even if U.S. refiners wanted to retrofit their facilities to process more U.S. light sweet crude (at a cost of billions), many operations would operate at reduced efficiency which inevitably translates to higher costs at the pump for consumers.

Regional Price Impacts: Where Will You Feel It Most?

Northeast (Maine, Rhode Island, Connecticut, Vermont, New Hampshire, Massachusetts, and Upstate New York)

If you’re filling up in the Northeast, you’ll see price increases first and more significantly, as a significant portion of this region’s fuel comes directly from the Irving Oil refinery in Saint John, New Brunswick, Canada. The refined products crossing the border would immediately incur the tariff costs. By mid-March 2025, the Northeast could expect fuel prices—including gasoline, diesel, and other petroleum products—to be 20-40 cents per gallon higher. For a typical 15-gallon fill-up, that’s an additional $3-$6 every time you visit the pump.

Midwest (North Dakota, Minnesota, South Dakota, Nebraska, Iowa, Kansas, Missouri)

Refineries across the Midwest rely heavily on Canadian crude oil, but the impact on pump prices would take longer to materialize. Since crude oil must first be refined into fuel products, we’ll likely see a lag of a couple weeks before prices begin to climb. While economic disruption caused by the tariffs could partially offset some price increases, residents in the Midwest could expect gasoline and diesel prices to rise by 5-20 cents per gallon.

Great Lakes (Michigan, Wisconsin, Illinois, Indiana, Ohio, Pennsylvania)

The Great Lakes region’s refineries are particularly dependent on Canadian crude oil inputs. Like the Midwest, there would be a processing delay before consumers feel the full impact at the pump. Residents across these states should prepare for price increases of 10-25 cents per gallon for both gasoline and diesel, though some economic effects from the tariffs could slightly moderate these increases.

Rockies (Montana, Idaho, Wyoming, Colorado, Utah)

Mountain region refineries also process significant amounts of Canadian crude oil. Like other inland regions, there would be a lag between tariff implementation and price increases at local gas stations. Consumers in the Rockies could expect fuel price increases of 10-20 cents per gallon once refiners have worked through their pre-tariff oil supplies.

Other Regions (South, Southeast, Mid-Atlantic, Southwest and West Coast)

At this time, there would be negligible impact to other regions of the U.S., which are less reliant on Canadian crude oil. But with the typical seasonal shift ahead of us, prices are likely to increase in the weeks ahead just as they do every year with rising demand and temperatures, planned refinery maintenance, and the transition to summer gasoline in process across the entire U.S.

The Tariff Impact

The oil market is incredibly complex, with infrastructure developed over decades to optimize efficiency. Political decisions that disrupt these systems rarely produce the intended consequences but almost always result in higher costs for everyday Americans.
The real-world impact of tariffs won’t be to shift refining patterns, instead it will be to add costs throughout the system, and these costs will make their way to consumers in the form of higher prices for gasoline, diesel, and other petroleum products starting today.