Canadian Oil Shortage Hits US Refineries Hard Ahead of Labor Day

US refineries are facing a severe supply crunch from Canada, their largest foreign crude supplier. According to government data, they are currently processing at the highest volumes in eight years, attempting to capitalize on record-high diesel margins.

The problem arises because Alberta's stored crude is at its lowest point in over a year, leaving no buffer to cover the shortage. In March 2025, refineries shipped crude ahead of expected tariffs when storage levels were similarly low.

Midwest refineries are hit hardest by this issue, as Canadian crude accounts for around 70% of their processed oil. US imports from Canada have already declined significantly since May last year, and maintenance work will continue to reduce supply.