Upwards of 4 million barrels of Canadian crude oil flow into the United States every single day.
The Collapse of U.S./Canada Trade Talks Threatens America’s Energy Security
David Blackmon, Energy Additions, August 23, 2026(subscription required)
The sudden collapse of U.S.-Canada trade talks late last week represents far more than another diplomatic snarl in the ongoing tariff spat between Washington and Ottawa. It strikes at the heart of America’s energy security in ways that too many in the political class are reluctant to acknowledge.
Upwards of 4 million barrels of Canadian crude oil flow into the United States every single day. Far from some marginal trade flow that can be casually disrupted without consequence, those Canadian barrels make up the single largest source of foreign crude for American refiners, and the overwhelming majority of it is the heavy, sour grades produced from Alberta’s oil sands.
Those heavy barrels are not interchangeable commodities that refiners could simply swap out for lighter grades from the Permian or the Gulf of Mexico. U.S. refining infrastructure – particularly the complex facilities in the Midwest and along the Gulf Coast – was deliberately configured over decades to process exactly this type of crude. These volumes of heavy crude, blended with lighter domestic grades, yield the gasoline, diesel, jet fuel, and petrochemical feedstocks that keep the American economy moving.
Without reliable access to Canadian heavy oil, utilization rates at those plants would drop, product yields would suffer, and prices at the pump and for trucking diesel would spike. The current tight global supply situation only compounds the problem. Spare capacity is limited, alternative heavy crude sources from places like Venezuela or the Middle East face their own geopolitical and logistical hurdles, and shipping longer distances across oceans would add both cost and vulnerability. Replacing lost Canadian volumes on short notice would be near-impossible for U.S. refiners operating at high rates to capture strong diesel margins.
Futures prices for diesel have soared to roughly $100 above those of crude oil, the divergence between prices for the two products reflecting a dearth of diesel refinery capacity worldwide.
Looking for an energy shock? It’s in diesel.
Matt Phillips, Axios, August 23, 2026
A long-predicted energy shock is finally showing up in sky-high prices for diesel fuel.
Why it matters: Diesel fuel is a key input for virtually anything grown or transported throughout the U.S., making it a potentially inflationary force.
Between the lines: It means the market’s relief over crude oil’s relatively muted reaction to the Iran war could be misplaced.
- “The market is out to lunch, looking at crude oil prices,” Jeff Currie, a former commodities analyst with Goldman Sachs and Carlyle, tells Axios. “Look at diesel prices.”
The latest: Futures prices for diesel have soared to roughly $100 above those of crude oil, the divergence between prices for the two products reflecting a dearth of diesel refinery capacity worldwide.
- This refinery shortage has been a growing issue since Ukraine launched a highly effective drone campaign targeting Russian refineries, resulting in a collapse of Russian production of refined product, shortages and a government ban on exports.
- That’s a big deal because Russia is one of the world’s largest exporters of diesel.
- The closure of the Strait of Hormuz has also curtailed global supplies of refined products previously exported by Gulf states.
Zoom in: This isn’t just a story of abstract geopolitical choke points. The cost of diesel will likely filter down to everyday life.
- The cost of diesel accounts for between 3% to 5% of production costs for major U.S. crops like wheat, soybeans and corn, Axios’ Ben Geman recently wrote, putting upward pressure on prices for those items as well as other agricultural products that use them as feedstock.
- Diesel is the key fuel for trucking, and its surge has already raised the costs of truck transportation for goods throughout the economy, which is gradually getting passed down the food chain.
Case in point: Performance Food Group, a distributor of food products to restaurants and convenience stores, said on a recent earnings call that it faced some $16 million in additional costs related to diesel prices during its recently completed quarter, telling analysts its “team worked to manage the increase in diesel prices through our surcharge program.”
- TL;DR: In other words, price increases.
The bottom line: “Diesel is the cost base of everything. Every container, every tractor, every locomotive, every mine truck – you get the idea,” Currie wrote on X last week, adding: “That pass-through will reach into trucking, food and producer prices, and it is barely getting started.”
When it takes a peer reviewed study to explain why the strongest candidate lost, we have made voting harder than it needs to be.
SEVENTEEN NAMES IN. TWO AND TWO OUT.
Kevin McCabe, August 22, 2026
Seventeen people ran for governor of Alaska last Tuesday.
Four of them will be on your ballot in November. Two Democrats and two Republicans.
Supporters of ranked choice voting and the jungle primary told us this system would give voters more choice and clearer results. Let’s look at what it actually gave us.
This system does not produce clarity. It produces arithmetic.
Most Alaskans remember the 2022 special election for Congress. Mary Peltola beat Sarah Palin after Nick Begich was eliminated in the first round.
Then mathematicians went back and studied the actual ballots. Begich would have beaten both of them.
Jeanne Clelland, a professor of mathematics at the University of Colorado Boulder, ran the numbers from the ballots Alaskans marked. Against Peltola one on one, Begich wins with about 52 percent. Against Palin one on one, he wins with about 61 percent. He beat every opponent head-to-head, yet he was the first of the final three eliminated.
The simplest way to say it is this. Among voters who marked a second choice, Begich won an overwhelming share. The system threw those votes out before counting them.
Mathematicians call a candidate who beats every opponent one on one the “Condorcet winner.” Clelland found Begich was the Condorcet winner in 2022, and Palin the Condorcet loser. The candidate who could beat either opponent was eliminated first. The one who could beat neither made the final round.
That was not voters filling out ballots wrong. Those ballots did exactly what voters told them to do. The result came from the counting method itself.
