A war between the United States and Israel against Iran, launched in late February, has severely disrupted oil flows through the Strait of Hormuz — one of the world's most critical maritime chokepoints — pushing Asian importers to urgently seek alternative suppliers. Canada's Trans Mountain pipeline system has emerged as a key beneficiary of that shift, with shipments to Japan, India, Malaysia and Singapore all rising sharply in recent months.
The latest sign of this realignment came this week when a Marshall Islands-flagged tanker, Freedom Glory, departed Vancouver carrying up to 750,000 barrels of Trans Mountain (TMX) crude destined for Japan. The cargo was purchased by Eneos, Japan's largest oil refiner, and the ship was chartered by Exxon Mobil, according to data from tracking firm Kpler. It marks the first Canadian crude shipment to Japan since early 2025. The development follows Tokyo's decision to cut its economic growth forecast for the year to 0.9 percent, down from 1.3 percent, in part due to elevated oil prices caused by the conflict. Before the war began, Japan imported more than 90 percent of its oil through the Strait of Hormuz.
The disruption is being felt well beyond Japan. In Iraq, operations at Umm Qasr — the country's only deep-water port, located at the northern tip of the Persian Gulf roughly 60 kilometres south of the Basrah oil fields — have ground to a halt. Iran's blockade of the Strait of Hormuz has prevented commercial vessels from reaching the port, emptying its docking areas and cargo yards. Since oil revenues account for approximately 90 percent of Iraq's national budget, the slowdown has dealt a serious blow to the country's economy. Umm Qasr also handles significant volumes of imported grain and sugar, raising concerns about food security.
The Trans Mountain pipeline, which runs from the landlocked province of Alberta to a marine terminal in Burnaby, British Columbia, carries up to 890,000 barrels per day and has been operating at nearly 90 percent capacity since mid-2025. Asian destinations now account for roughly 77 percent of all oil exports leaving Vancouver, up from 51 percent in 2024. Canadian crude already supplies close to 60 percent of total US crude oil imports, according to the US Energy Information Administration.
The crisis is also threatening another regional waterway: Iran-backed Houthi rebels in Yemen last week threatened to blockade Saudi shipping through the Bab el-Mandeb strait, which connects the Red Sea to the Gulf of Aden, and fired on at least one Saudi tanker. Meanwhile, Canadian Prime Minister Mark Carney has indicated he does not plan to weaponise Canada's oil exports as leverage in ongoing trade tensions with Washington, saying that reliable supply is itself a form of strategic influence. "Canadians can be trusted," Carney said. "When you're a supplier of a key commodity, you gotta think really hard about not supplying."