Suncor Energy (TSX: SU, NYSE: SU) could be better positioned than its peers to weather potential U.S. import tariffs on crude oil and refined products, CEO Rich Kruger said Thursday on the company’s earnings call.
Kruger’s remarks come amid escalating trade tensions after former U.S. President Donald Trump threatened a 10% tariff on Canadian energy exports. While the levies have been temporarily delayed, uncertainty remains over future trade policy.
Suncor’s domestic refining footprint provides a buffer
Kruger pointed to Suncor’s large refining presence in Canada as a key advantage. With refineries in Edmonton, Montreal, and Sarnia, Ontario, and only one in the U.S. (Colorado), Suncor keeps a significant portion of its production within Canada.
“Probably 60 to 65% of our barrels stay north of the border,” Kruger said. “That’s a high fraction. We have a large Canadian refining footprint, and that puts us in a relatively stronger position compared to some of our peers.”
Despite this, Canada’s refining capacity is limited, and most Western Canadian crude still flows south to the U.S. via pipelines and rail. However, Suncor is a committed shipper on the expanded Trans Mountain pipeline (TMX), which provides an export route to markets beyond the U.S.
A TMX spokesperson noted that geopolitical uncertainty could drive increased interest in shipping on the pipeline, though exact volumes remain unclear.
Suncor executives also highlighted plans to expand marine shipments from TMX’s Westridge Marine Terminal, including potential night-time loading operations and deeper dredging at the Second Narrows Bridge to accommodate larger cargoes.
Earnings beat expectations despite profit dip
Suncor reported fourth-quarter adjusted earnings of $1.57 billion, slightly lower than the $1.64 billion recorded in Q4 2023. The drop was attributed to weaker refined fuel sales and higher royalty costs, partially offset by strong production growth.
Upstream production hit a record 875,000 barrels per day (bbl/d), up from 808,100 bbl/d a year earlier. The increase was driven by higher ownership in the Fort Hills oilsands mine, which Suncor now fully owns after acquiring TotalEnergies SE’s stake last year, and record output from the Firebag facility.
The company also set a new refined product sales record of 613,000 bbl/d, surpassing the previous quarter’s high.
Suncor’s cost controls and capital discipline stood out, with capital spending coming in 9% lower than RBC Capital Markets had forecast. RBC analyst Greg Pardy called the results “robust”, adding that they reinforce a bullish medium- and long-term outlook.
Stock performance and outlook for 2025
Year to date, Suncor shares are up 7.2%, reflecting investor optimism around stronger oil prices and disciplined capital returns. Over the past 12 months, the stock has gained 14.5%.
Looking ahead, analysts see continued upside potential.
CIBC Capital Markets and Scotiabank maintain outperform ratings, citing strong cash flow generation and buyback commitments. Morgan Stanley has a neutral stance, noting that while Suncor’s refining footprint is a strength, the broader Canadian energy sector remains tied to U.S. policy shifts.
Suncor ended the year with net debt of $6.86 billion, beating analyst estimates and reinforcing its commitment to returning excess cash to shareholders. The company has pledged to return 100% of free cash flow to investors after hitting its $8 billion debt target last quarter.
With potential U.S. trade barriers looming, Suncor’s strong domestic refining base, record production, and capital discipline will be closely watched by investors as 2025 unfolds.