Calgary, AB – – September 29, 2026 -- Canadian oil sands production is projected to average a record 3.5 million barrels per day (b/d) in 2026, a 100,000 b/d increase of 3% over the prior year, according to S&P Global Energy's latest 10-year production outlook. Output is forecast to climb further to 3.9 million b/d by the early 2030s.
Production has grown almost every year since 2001, when output stood at just 300,000 b/d
The only exception was 2020, when COVID-19 disrupted demand. Most of the 2026 gains stem from optimization of existing facilities rather than new construction, S&P Global Energy said.
Nearly all current capacity was built between 2009 and 2018, with new construction rare since then
S&P Global Energy analysts now see conditions forming for a potential return to new-build projects. Kevin Birn, Chief Canadian Oil Markets Analyst at S&P Global Energy, said the oil sands sector has proven resilient through low oil prices, regional price volatility and shifting climate policy, and that the open question is no longer whether output will keep growing but how much additional expansion could materialize if new projects move forward.
Policy alignment and pipeline plans fuel optimism for new project approvals
Factors cited include announced expansions to pipeline export capacity, extended and clarified carbon pricing through 2040, faster review timelines for projects deemed in the national interest, and possible changes to fiscal terms for new oil sands developments. S&P Global Energy also pointed to Canada's deteriorating trade relationship with the United States over the past 18 months as a driver reframing domestic energy output as a national security and economic growth priority.
Federal-provincial alignment on upstream growth is the strongest in over a decade, analyst says
Birn said the current degree of cooperation between Canadian federal and provincial governments on upstream growth has not been seen in more than ten years, and that reduced investment uncertainty could set the stage for renewed construction activity.
New projects remain capital-intensive with longer lead times, leaving shareholder appetite as a key variable
A final implementation agreement tied to the Canada-Alberta Memorandum of Understanding is expected on November 15, 2026, involving the governments of Alberta, Canada, and the oil sands industry. S&P Global Energy said the terms of that agreement will be a critical signal for future investment decisions.
S&P Global Energy estimates up to 500,000 b/d of incremental capacity could emerge beyond current forecasts
Celina Hwang, Director, Canadian Crude Oil Markets at S&P Global Energy, said the estimate reflects previously proposed projects that stalled but could now advance under favorable conditions, representing what the firm views as the most attractive and expedient opportunities. She added that the potential upside could be even greater given the right conditions and additional time. The current outlook otherwise expects production to plateau after reaching 3.9 million b/d in the early 2030s.