Demand for oil-bearing land in Canada is sliding amid weak market prospects

According to authorities of the Canadian province of Alberta, the average price for leasing land for oilfield development has fallen to just above $560 per hectare this year. This is 18% below the 2024 figure.

As noted by Bloomberg, this is an early sign of the Canadian oil drilling sector's boom coming to an end after the earlier boost from the Trans Mountain pipeline upgrade. Bloomberg journalists associate this dynamic with global trade tensions and OPEC+ production build-ups that are pushing oil prices down.

The weakness of the global oil market is restraining the interest of Canadian producers in buying and developing new sites, Bloomberg concludes. Meanwhile, the United States is experiencing a similar situation with oil companies reducing the number of drilling rigs and work crews.

However, Canada is still expected to ramp up oil production in the coming years. According to S&P Global Commodity Insights, by 2030, the volume of crude extracted from Canada's oil sands will grow by about 500,000 barrels per day to 3.8 million barrels. Most of the crude produced is likely to be transported via Trans Mountain to the Pacific Rim.