War disrupts Irving Oil’s longtime Saudi crude supply

Canada’s largest oil colour refinery is looking for for young provide options as the U.S. State of war on Iran threatens one of its most reliable, and long-standing, sources of crude oil.

Irving Oil recently got permission from federal regulators to use a foreign-owned ship to bring crude oil from Newfoundland’s offshore fields to Saint John, in southern New Brunswick.

Saudi Arabia has been the most reliable source of crude for Irving's Saint John refinery since it opened in 1960, but Irving told regulators last month that this is no longer certain.

“The 2026 Iran conflict has resulted in the most significant crude oil supply disruption in recent history, with far-reaching implications for global production, shipping, refining, and energy security,” Irving said in its March 13 application to Transport Canada.

“In this context, it is essential for our customers, for our business, and for the broader energy security of Atlantic Canada that we have the ability to use foreign crude oil tankers to access Canadian crude oil.”

Five days later, Ottawa approved the application.

It grants Irving an exception to rules that normally restrict foreign vessels from transporting goods between two Canadian ports, clearing the way for the company to receive up to 680,000 barrels of Newfoundland crude starting later this month.

Irving said in its application it contacted six Canadian vessel owners, but none had ships available.

How the war in Iran is squeezing Irving Oil

The Saint John refinery produces gasoline and other fuels for markets throughout the Maritimes as well as the U.S. Northeast.

The company filed the application at the same time as what may prove to be the last shipment of Saudi oil for a while was en route to Irving’s Canaport terminal on the Bay of Fundy.

The SFL Albany left the Ras Tanura terminal in Saudi Arabia on Feb. 14 — two weeks before the U.S. Attacked Iran — and passed through the Strait of Hormuz bound for Saint John, according to the Vessel Finder website.

The Marshall Islands-flagged vessel was visible at anchor off Saint John over the last several days.

Irving also got permission from Transport Canada in February to use a foreign ship to transport crude from the Texas gulf coast to Saint John in May and June.

It’s not clear if that application was related to the looming war.

But the March application is explicit.

“The closure of the Strait of Hormuz — the world’s most critical oil corridor — has led to an almost complete halt in tanker movements, creating crude oil supply shortages that are impacting global energy markets,” Irving executive vice-president John Laidlaw wrote.

Irving got 21 per cent of its crude oil from Saudi Arabia in 2025, its largest source after the United States, which supplied 54.6 per cent, according to Statistics Canada.

Nigeria was a close third at 20.5 per cent.

As recently as 2018, nearly half of the refinery’s supply was Saudi crude.

Irving’s relationship with the kingdom began before the Saint John refinery was built.

Standard Oil of Canada, known as Socal, signed a concession agreement with Saudi Arabia in 1933 to exploit its oil reserves, becoming a 30 per cent owner of the state-owned oil company Aramco.

The deal required Socal to find buyers for 30 per cent of the country’s oil output.

When an oil glut in the 1950s left Socal with no buyers, it contacted K.C. Irving, who was making plans for his refinery.

Socal took an ownership stake in Irving Oil and the refinery, which helped finance the construction.

In return, Irving agreed to buy all its crude from Socal, according to Irving biographer John DeMont.

In 1958, the John Diefenbaker government looked at forcing all Canadian oil refineries to use crude from Western Canada.

Irving pushed back, arguing Alberta oil was more expensive to ship to Saint John than Saudi crude. Diefenbaker’s Canada-only policy was applied only as far east as Ontario.

The refinery opened in 1960.

Aramco eventually bought out Socal’s stake in the Saudi industry, and in 1989 Socal — by then renamed Chevron — sold its remaining stake in the Irving refinery.

Even so, Irving continued to buy Saudi oil in large volumes.

In 2016, Irving Oil’s then-CEO, Ian Whitcomb, said even the Energy East pipeline — set to bring Alberta crude to Saint John for export — would not lead Irving to drop the Saudis.

“We will add Western Canadian crude to our portfolio as the economics dictate but probably not at the expense of our Saudi barrels,” he told the National Post.

Irving’s March 13 application to the Canadian Transportation Agency said the company was talking to crude producers in Newfoundland and Labrador for “prompt acquisition” of its product.

Cenovus Energy, which delivered Western Canadian crude to Irving by tanker in 2020 and operates some of the Newfoundland sector, said it would leave it to Irving Oil to comment.

Provincial Affairs reporter

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