The chief executive of Imperial Oil Ltd. says he hopes Canada can avoid potential tariffs from the U.S. on energy products, but believes his company should be well-positioned to withstand the negative effects.
Speaking Friday on the company’s fourth-quarter earnings call, Imperial chairman and CEO Brad Corson said he hoped “diplomacy will prevail” in shielding Canadian oil and gas from any levies.
While he noted the U.S. is “heavily dependent on Canada’s heavy crude,” Corson added that it’s hard to predict whether the tariff threat from south of the border will materialize.
“We don’t know what’s going to happen with tariffs,” Corson said.
“I, along with many others, have spent a lot of time educating on both sides of the border around the unique and integral energy system that exists and how that is mutually beneficial to both countries.”
U.S. President Donald Trump had threatened to impose 25 per cent tariffs on imports from Canada and Mexico as early as Saturday. He said Thursday he would decide that night whether to include oil in that plan.
“Because they send us oil, we’ll see,” Trump told reporters while signing executive actions in the Oval Office Thursday afternoon.
“It depends on what the price is. If the oil is properly priced, if they treat us properly — which they don’t,” Trump said.
During a virtual address to the World Economic Forum last week, Trump had taken a more decisive tone.
“We don’t need their oil and gas. We have more than anybody,” he said.
Corson said avoiding restrictions on energy flow would be a “win-win” for both countries.
“Any tariffs will result in negative impacts broadly to the economy, customers, so let’s hope we avoid those,” he said.
“But I can’t control that. So what we’re focused on is, ‘What can we control?’ And what we control is ensuring that we have the lowest cost of supply, we have options for where we place our crude and products in the market.”
Corson said he believes Imperial would posses a “unique resilience” to potential negative effects of tariffs due to its production mix of both heavy and light crudes.
“The strength of integration, I think, makes us much more resilient than others,” he said.
“Feb. 1 appears to be a big day for tariffs and so we’ll be watching that closely, but I am confident that we will continue to be profitable, we’ll continue to generate material cash flow and be in a position to return that to our shareholders.”
He said that confidence underpinned Imperial’s decision to raise its quarterly dividend on Friday. The company announced it was raising the shareholder payout by 20 per cent to 72 cents per share, from 60 cents, as it reported a fourth-quarter profit of $1.23 billion, down from $1.37 billion in the same quarter last year.
The company said the profit amounted to $2.37 per diluted share for the quarter ended Dec. 31, down from $2.47 per diluted share a year earlier.
Analysts on average had expected a profit of $2.12 per share, according to LSEG Data & Analytics.
The result came as Imperial’s total revenue and other income amounted to $12.61 billion for the quarter, down from $13.11 billion in the same quarter last year.
Imperial said its upstream production in the quarter averaged 460,000 gross oil-equivalent barrels per day, its highest quarterly production in more than 30 years when adjusting for the divestment of XTO Energy Canada.
The result was up from 452,000 gross oil-equivalent barrels per day a year earlier.
Downstream throughput in the quarter averaged 411,000 barrels per day, with overall refinery capacity utilization of 95 per cent, compared with 407,000 barrels per day and 94 per cent utilization a year ago.
This report by The Canadian Press was first published Jan. 31, 2025.
Companies in this story: (TSX:IMO)
