Canadas Energy Sector Looking towards Asian Markets

World energy demand and prices are expected to rise in 2015, and Canadas production continues to outpace domestic demand creating ample potential for Canada to ramp up its energy exports beyond its current key US market, according to HSBC
The US currently receives 97% of Canadas energy exports. Oil exports to the US are expected to grow by 7.4% in 2014-16, moderating to just above 5% further out.
In contrast, petroleum exports to China will grow by 53.7% in 2014-16 and 10-14% further out. As a result, Chinas 0.2% share of Canadas fuel exports in 2013 is forecast to rise to 0.9% in 2020 and to 2.5% in 2040. Europe will also see stronger growth of energy imports from Canada.
The fastest-growing markets for Canadian exports in 2014-16 are expected to be Mexico, Korea, and China, and the fastest growing source markets for Canadas imports over the same period will be Mexico, Turkey, and the UK, according to the HSBC Forecast.
Survey respondents expect better trade opportunities with Asian markets in the near future. One quarter of Canadian firms surveyed saying that Asia will be the best opportunity for business growth over the next 6 months, compared to 42% of respondents globally.
Of the Canadian firms surveyed, 60% cited fluctuating exchange rate conditions as the top barrier to export and import business, and costs of essential services such as shipping, logistics and storage were a primary barrier for 44% of survey respondents.
The recent weakening of Canadas world export share has led firms to begin diversifying their trade routes toward Mexico and broader Asia. By 2017, China will take the lead as the fastest-growing market for Canadian exports. By 2017, imports from India, Turkey, and China will show the strongest growth.
HSBC predicts that from 2016, international business growth will increase at significant levels year-on-year as both developed and developing markets come back to the world stage. This will account for increased trade worth trillions of dollars each year, as businesses capitalise on the rise of the emerging market consumer and developing markets stabilise their productivity levels for the future.