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, as part of a new trade deal with Canada. However, experts suggest that Trump’s statement may be influenced more by political motives than actual industry considerations.
In a recent social media post, Trump announced a temporary halt on new tariffs on Canadian goods, indicating a “deal” with Canada and mentioning the potential revival of the Keystone XL Pipeline. Prime Minister Mark Carney did not directly address Trump’s statement.
Dennis McConaghy, a former executive at TransCanada Corporation, noted that Trump’s signal regarding Keystone XL could impact the upcoming trade negotiations with Canada. Since imposing tariffs on various Canadian goods in 2025, Trump has frequently emphasized the lack of necessity for Canadian imports, excluding certain key items like oil from tariffs.
However, industry experts caution that reviving the Keystone XL project could face significant challenges, both politically and environmentally. The potential revival of the project under the current administration may be met with obstacles, particularly with the uncertainty of future political landscapes.
Valérie Beaudoin, a member of the federal Advisory Committee on Canada-U.S. Economic Relations, highlighted that approving Keystone XL might pose more challenges for the U.S. administration compared to Canada. The decision to resurrect the project could be seen as a response to past administrations’ policies and as a strategic move in the current market context.
The Keystone Pipeline System, owned by South Bow Corp., plays a crucial role in transporting Canadian and U.S. crude oil to American refining markets. Despite previous setbacks and cancellations, the project has garnered renewed interest, especially with the potential Prairie Connector project, which aims to boost Canada’s crude oil exports to the U.S.
South Bow’s CEO, Bevin Wirzba, emphasized the sustained demand for Canadian crude in the U.S. market, highlighting the company’s efforts to secure commitments for the Prairie Connector project. While the project holds promise for enhancing oil transportation services, a final investment decision is pending.
Overall, the potential revival of the Keystone XL pipeline signifies a complex interplay of economic, political, and environmental factors that could shape the future of energy trade between Canada and the United States.