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US-Canada Trade War Threatens Electricity Imports, Prices
By Robert Walton of UtilityDive
An escalating trade war between the United States and Canada is once again threatening to ensnare the electric power sector at a time when consumers are already stretched thin.
Canada is expected to announce retaliatory tariffs on U.S. goods Tuesday after President Donald Trump’s 50% tariffs on about $20 billion in Canadian goods went into effect over the weekend, with threats of more on the way.
On Monday, Ontario Premier Doug Ford told the Associated Press that “everything is on the table,” including halting the province’s critical minerals and electricity exports entirely. The BBC reported Ford said he and Canadian Prime Minister Mark Carney discussed a 25% tariff on electricity to the U.S.
In 2025, amid a previous trade dispute, Ontario enacted a 25% tariff on power exports to the U.S. The two sides eased tensions shortly thereafter, and the tariff was eliminated a day after taking effect.
ISO New England, in a statement to Utility Dive, said that if Canada opted to reduce or eliminate electricity trade, it “would not anticipate reliability issues tied to reduced imports, at least under typical weather conditions.”
Under extreme temperatures, however, supplies in New England “could become tight, but that would hinge on many factors that are difficult to project,” the grid operator added.
“It’s also important to note that power flows both ways between the New England and our Canadian neighbors these days,” it continued. “In the event Canadian provinces reduce (or entirely cut) the amount of electricity they are sending to New England, we would expect the impact to largely be financial, in the form of higher wholesale market prices. We would also anticipate emissions in the region increasing.”
The U.S. Energy Information Administration, earlier this month, highlighted the growing value of electricity and natural gas trade between the two countries.
“The value of electricity trade between the United States and Canada totaled $3.2 billion in 2025, 67% of which was electricity imported from Canada into the United States,” EIA analysts noted. Electricity trade between the two countries “is relatively small compared to trade in other energy sources.”
The two countries’ electricity sectors are more intertwined today, however. In June, North America’s longest fully-buried transmission line began delivering Canadian hydropower to New York City. The $6-billion Champlain-Hudson Power Express is expected to meet up to 20% of the city’s electric needs.
The New York ISO is in “close and regular contact with Hydro Quebec and Ontario’s Independent Electricity System Operator,” Kevin Lanahan, senior vice president of external affairs and corporate communications for the grid operator, said in a statement to Utility Dive.
“The NYISO anticipates having adequate supplies to meet expected demand on the system,” Lanahan said.
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Oil Dumps As Iran, Oman Push To Reopen Hormuz; Satellite Image Shows Gulf Producers Ramping Up
Brent crude futures dropped for a third session as Iran and Oman advanced plans for a temporary maritime corridor through the Strait of Hormuz.
Brent tumbled to $85 a barrel early Wednesday, down more than 9% for the week, while West Texas Intermediate traded around $80. Crude remains up more than 41% this year following the US-Iran conflict and ongoing disruptions at the Hormuz chokepoint.
Earlier, Oman's state news agency reported that Iranian Foreign Minister Abbas Araghchi and Omani Foreign Minister Badr Albusaidi discussed an "interim framework" establishing a temporary joint shipping corridor.
Iranian Deputy Foreign Minister Kazem Gharibabadi said both countries agreed on a temporary route and intend to negotiate a permanent corridor within 30 to 60 days, according to Tasnim. No timeline has been given for when the temporary deal to reopen the critical waterway would begin.
Talk of an interim deal comes as oil loadings from Iraq's Persian Gulf export terminals surged at the beginning of the week, offering one of the clearest signals yet that regional Gulf producers expect Hormuz tensions to dissipate.
Satellite imagery showed seven tankers collecting Iraqi cargoes, with a combined carrying capacity of roughly 13 million barrels, according to Bloomberg.
Maritime research firm TankerTrackers also reported on X, saying, "A busy day in the Gulf of Oman, where there are at least fifteen sets of STS transfer sessions taking place. We count 25 million barrels of crude oil; plus some refined products. The oil originates from almost every country in the region, minus Iran."
A busy day in the Gulf of Oman, where there are at least fifteen sets of STS transfer sessions taking place. We count 25 million barrels of crude oil; plus some refined products. The oil originates from almost every country in the region, minus Iran.#OOTT #IranWar #Tankers pic.twitter.com/TAba26mJiW
— TankerTrackers.com, Inc. (@TankerTrackers) August 25, 2026"It seems crude is now beginning to price in a sooner rather than later peace deal," said Dennis Kissler, senior vice president for trading at BOK Financial Securities, who Bloomberg quoted.
Kissler noted, "With some oil still getting through the strait, Iran and the US are more likely to be in a newer state of de-escalation as both sides are looking for an off-ramp."
By now, readers know that the energy crisis is not necessarily about crude, but rather refined products, as diesel crack spreads in the US topped $100 a barrel. The good news is that, by midweek, the spread was trading around $88.
Related:
Last week, veteran commodities strategist Jeff Currie detailed on X that the next commodities bull market was poised for another leg higher (read note).
The latest developments in the Gulf are promising signals, but an interim framework should not be mistaken for a durable normalization of regional tanker transits through the maritime chokepoint. Previous de-escalation efforts have repeatedly broken down, often returning the region to drone attacks on tankers and short-lived military tit-for-tat bombing campaigns. Until a permanent and enforceable shipping deal is set in stone, the Hormuz risk premium is likely to remain embedded across crude and refined-product markets.
Tyler Durden Wed, 08/26/2026 - 06:55