Saudi Arabia has already lost ground in the US as its exports to the key market have slumped in recent months, squeezed out by a combination of rising US output and record imports from Canada. Should the Keystone XL pipeline that would link the Alberta oil sands to the US Gulf Coast refineries ever be built, Canadian heavy crude would lead to further erosion of Saudi market share. The pipeline passed a major hurdle recently when the US Congress voted in favor of the $8bn project, though President Barack Obama has again said he will use his veto powers to block the project − a position bolstered by the slump in oil prices. This has raised questions as to whether Alberta’s high cost oil sands can even be produced at current price levels.
The recent shift in Saudi export policy, and by association of OPEC’s strategy in the wake of the landmark 27 November meeting, was designed to defend market share and maintain output at any price. Although Canadian oil sands were not specific targets of Riyadh’s policy, northern Alberta’s tar sands deposits are amongst the most expensive in the world to develop, and Canadian companies have been among the first to be impacted by the near 55% slide in oil prices since June last year. (CONTINUED - 1206 WORDS)