US refiners that process Canadian crude would not easily find alternatives in the event of tariffs, Argus said.

• Trump has threatened to put a 25% tariff on all goods from Mexico and Canada.
• Canadian crude constitutes 65% of all feedstocks in the US Midcontinent region, which has limited connectivity to US crude and product pipelines.
• There refineries predate the shale boom, configured to run on heavy sour grades, typically imported.
• "The crude oil pipeline logistics have changed over the decades such that the loss of Canadian oil into these regions can only be replaced with domestic production," Lipow Oil Associates’ Andrew Lipow said.
• "Unfortunately, there is very little pipeline capacity to deliver crude oil produced in Texas and New Mexico to refineries in Montana, Minnesota, and Chicagoland."
• Lipow said tariffs could lead to three scenarios: Canadian crude discounts widen, US refiners pay more for crude, including for WTI which would rise to import parity, or Canadian crude is becomes exempt from tariffs.