How oil sands producers are rewriting 2026 growth plans

As oil prices soften and global supply remains under pressure from rising OPEC+ output, oil producers are rethinking how they grow. 

The oil sands production forecast for 2026 reflects this shift clearly: companies are prioritizing efficiency, cost control, and cash flow generation over large-scale expansion. 

Instead of launching new megaprojects, producers are concentrating capital on optimizing existing assets, improving reliability, and lowering unit costs to remain competitive in a more volatile market.

This approach reflects a broader industry trend: protect margins first, volumes second.

Capital spending rises with clear operational targets

One of the most illustrative examples of this strategy comes from Imperial Oil, which has outlined higher capital and exploration spending for 2026, in the range of C$2.0–2.2 billion, according to Reuters.

While the increase is moderate compared to previous cycles, it is highly targeted. 

The focus is on reliability improvements, debottlenecking, and operational efficiency within existing oil sands assets rather than greenfield developments.

The objective is straightforward: structurally lower unit costs while sustaining incremental production growth.

Oil sands output continues to edge higher

Upstream production expectations for 2026 point to a continued rise, with projected output between 441,000 and 460,000 barrels of oil equivalent per day. 

This reflects optimization efforts at mature oil sands operations such as Cold Lake, Kearl, and Syncrude, where incremental gains can deliver outsized cash flow benefits once fixed costs are covered.

In contrast to rapid growth strategies of the past, this model favors predictability and resilience over speed.

Downstream constraints reveal trade-offs

While upstream volumes are expected to improve, downstream production is forecast to decline slightly due to planned maintenance shutdowns at refining assets. 

Expected downstream output of 395,000–405,000 barrels per day underscores a key reality for integrated producers: maximizing long-term value often requires short-term operational pauses to protect asset integrity and reliability.

These trade-offs are increasingly accepted as part of disciplined capital management.

Cost discipline extends to workforce restructuring

Efficiency efforts are not limited to assets. 

Workforce reductions announced earlier, including a planned 20% cut by 2027 and a reduced footprint in Calgary, signal how seriously producers are pursuing leaner operating models. 

In a lower-price environment, organizational structure becomes just as important as technical performance.

Why this matters for the oil sector

The 2026 outlook shows how oil sands producers are adapting to a world where capital is scarce, investors demand returns, and volatility is the norm. 

The emphasis on cash flow, unit cost reduction, and asset optimization is likely to define upstream strategy across North America in the coming years.

Imperial Oil’s plan offers a clear snapshot of this transition—one that prioritizes durability over aggressive expansion.

How oil sands producers are rewriting 2026 growth plans