U.S. President Donald Trump has indicated the potential revival of the Keystone XL oil pipeline project, previously abandoned by past administrations, under a new trade agreement with Canada. However, experts suggest that Trump’s mention of the project may have more political implications than actual energy considerations.
In a recent social media post just before the initiation of new tariffs on Canadian goods, Trump announced a temporary halt on tariffs and highlighted the possibility of reviving the Keystone XL Pipeline, which he claimed was terminated by his predecessor. Prime Minister Mark Carney did not directly address Trump’s post.
Dennis McConaghy, a former executive involved with the project, viewed Trump’s statement as a strategic move amidst trade negotiations. Since imposing tariffs on Canadian goods in 2025, Trump has targeted various sectors of Canada’s economy while emphasizing that the U.S. can function independently from Canada, despite exceptions for certain commodities.
While some see Trump’s mention of the Keystone XL project positively, others, like Carlo Dade from the University of Calgary, caution that the project could face significant challenges given the current political and environmental landscape. Valérie Beaudoin, from the Advisory Committee on Canada-U.S. Economic Relations, believes that reviving the project may pose difficulties for the U.S. administration.
The Keystone Pipeline System, owned by South Bow Corp., plays a crucial role in transporting Canadian and U.S. crude oil to American refineries. Trump’s administration has previously taken steps to revive sections of the project, with ongoing discussions about its potential reinstatement.
South Bow is currently collaborating with Bridger Pipeline on the Prairie Connector project, utilizing parts of the Keystone XL pipeline for increased crude oil exports to the U.S. If completed, the project could significantly benefit Canada’s oil exports.
Despite the positive outlook for the project, South Bow has yet to finalize its investment decision. Nevertheless, the company remains optimistic about the long-term demand for Canadian crude in the U.S. refining market.
Overall, while Trump’s mention of the Keystone XL project has sparked discussions, the actual revival of the project remains uncertain, subject to various political, economic, and environmental factors.
