A cargo of Canadian crude oil is headed to Japan, the first such shipment in more than a year, as the war between the United States and Iran continues to squeeze the flow of Middle East oil through the Strait of Hormuz. Tracking firm Kpler identified the vessel as the Freedom Glory, a Marshall Islands-flagged tanker chartered by Exxon Mobil, which left Vancouver carrying up to 750,000 barrels of crude loaded via the Trans Mountain pipeline. The cargo was purchased by Eneos, Japan’s largest oil refiner.
The shipment reflects a broader scramble among Asian economies to diversify their oil supply chains since fighting between the US, Israel and Iran erupted in February. Japan had previously imported more than 90 percent of its crude through the Strait of Hormuz, leaving it especially exposed as the conflict has periodically disrupted shipping through the waterway, including tanker strikes and mining threats from Iranian forces.
Tokyo cut its economic growth forecast for the year to 0.9 percent from 1.3 percent on Thursday, citing higher oil prices tied to the disruption, a sign of how the conflict is beginning to weigh on major economies far from the fighting itself. Japanese officials and refiners have said they are working to secure alternative crude sources to reduce dependence on the strait for the remainder of the year.
The Trans Mountain pipeline, which carries up to 890,000 barrels of crude a day from Alberta to a marine terminal in Burnaby, British Columbia, has become an increasingly important outlet for Asian buyers seeking non-Middle East supply. Exports via the pipeline to Asia accounted for nearly 77 percent of total oil shipments from Vancouver this year, up from about 51 percent in 2024, according to industry data. India, Malaysia and Singapore have all resumed purchases of Trans Mountain crude since the war on Iran began.
Industry analysts note that Japanese refiners face technical obstacles in scaling up Canadian imports, since most domestic refineries are configured to process lighter Middle Eastern grades rather than the heavier, higher-sulphur oil sands crude that dominates Canadian exports, meaning additional upgrading investment would likely be needed for Canadian oil to become a reliable long-term substitute.
Canadian oil already accounts for close to 60 percent of US crude imports, according to the US Energy Information Administration, underscoring Canada’s growing role as a global alternative supplier as Middle East volumes remain at risk. Canadian Prime Minister Mark Carney has said he does not intend to use the country’s oil exports as leverage in trade negotiations with Washington, even as the US has imposed new tariffs on Canadian products.
The Hormuz disruptions have added a fresh test for global energy markets already strained by nearly five months of conflict, with Asian governments increasingly treating supply diversification as an urgent priority rather than a long-term contingency plan.
Sources: Al Jazeera, Yahoo Finance, OilPrice.com