Updated June 2025
Summary
Alongside a drop in global oil prices in 2024, inflation in Alberta has remained above 2% leading to higher capital and operating costs for oil production. In light of these challenges, new wells drilled grew by 23%, indicating that prices were high enough to ensure a good return on new investments. Consequently, crude oil production increased by 3.5% in 2024.
The increase in crude oil production has reached a nine-year high, showing robust operations in Alberta. Light crude oil comprised 56% of 2024 production and ultra-heavy crude oil 23%. Production increases were most apparent in high-value areas within Petroleum Services Association of Alberta (PSAC) areas 2 and 7.
Figure S4.1 shows the average daily crude oil production from all wells by (PSAC) area.
Production in 2024
In 2024, production increased to 84.2 thousand cubic metres (103 m3/d) or 530 thousand barrels per day (103 bbl/d), a 3.5% increase from 81.4 103 m3/d (512.2 103 bbl/d) in 2023.
Despite prices dropping slightly in 2024, production growth has persisted primarily due to productive formations such as the Cardium and Montney (in PSAC 2) and the Peace and Spirit River Formations (in PSAC 7). These formations provided sufficiently high financial returns to support increased drilling and production. Horizontal well optimization has also supported production growth. With most wells drilled being horizontal, the efficiency gains from hydraulic multistage fracturing and improved technology have helped to keep operations efficient (see the well activity page).
Crude oil production in 2024 consisted of
- 56.4% light crude oil,
- 14.2% medium crude oil,
- 6.6% heavy crude oil, and
- 22.8% ultra-heavy crude oil.
Producers are increasingly commercializing formations with large volumes of light and ultra-heavy crude oil, such as the Cardium Formation, Montney Formation, and Mannville Group, due to the price premium on light oil and the relatively better economic returns on ultra-heavy oil.
Table S4.1 shows the crude oil production and wells placed on production in 2023 and 2024 and includes base case forecasts to 2034.
Base Case Forecast for 2025 to 2034
Based on the oil price forecast, total crude oil production is expected to increase from 84.2 103 m3/d (512.3 103 bbl/d) in 2024 to a peak of 91.6 103 m3/d (576.3 103 bbl/d) by 2027 as the number of new wells placed on production remains relatively elevated. Producers are expected to take advantage of the Trans Mountain Pipeline Expansion. However, a decline in crude oil production to 82.8 103 m3/d (521.2 103 bbl/d) is anticipated by 2034 as the number of new wells drilled is not expected to offset the decline in production of existing wells.
The share of light crude oil production is expected to decrease from 56.4% in 2024 to 52.3% by 2034, whereas ultra-heavy crude oil production is expected to increase from 22.8% in 2024 to 27.5% by 2034.
Figure S4.2 shows the average daily production of crude oil by density.
One-Year Tariff Scenario (Tariff Case)
Tariffs applied to oil and gas exports are expected to last one year, resulting in increased uncertainty and supply chain disruptions. In the tariff scenario, compared with the base case, lower oil prices and higher production costs are forecast primarily due to retaliatory tariffs. Consequently, production levels are expected to fall below the base case forecast despite a similar forecast trajectory.
Production in 2025 is expected to be 2% lower than the base case at 84.7 103 m3/d (533.1 103 bbl/d). Crude oil production rebounds in 2026 and peaks in 2027 at 88.5 103 m3/d (557.0 103 bbl/d) before gradually declining to around 79.2 103 m3/d (498.4 103 bbl/d) by 2034. Forecasted production is expected to be, on average, 4% below the base case due to the initial reduction in new wells placed on production and lower prices throughout the forecast period.
Figure S4.3 depicts projected crude oil production in both the base case and tariff case forecasts.
