Could Canada’s energy sector help offset impacts from the Iran conflict? – National

As the Iran conflict threatens global oil and gas supplies, Canada’s energy and resource sector may be able to offset some of these impacts and see benefits to the economy.

But experts say the challenge is that Canada’s current infrastructure and logistics may not be able to meet this sudden spike in demand.

“This is really a critical point. We [Canada] have the resources, we can produce more oil and gas for that matter, but still our ability to deliver it to the right markets is limited,” says Opher Baron, a distinguished professor of Operations Management at the Rotman School of Management.

Iran has effectively closed the vital Strait of Hormuz in the Persian Gulf region by threatening virtually all ships that try to pass through the narrow chokepoint, including oil tankers.

About 20 per cent of the world’s oil supply passes through the Strait of Hormuz, and Canada is also rich in energy resources, including crude oil and natural gas.

The U.S. is the top producer of crude oil globally, responsible for 22 per cent of the total supply, while Saudi Arabia and Russia are second and third, respectively, and each contributes about 11 per cent of the world’s oil, according to the U.S. Energy Information Administration, or EIA.

Canada is the fourth largest contributor of the world’s crude oil at six per cent. But the Iran conflict could mean that number may be about to rise.

The Canadian dollar has seen some ups and downs but has remained largely stable during the conflict, as of publication time, and is hovering around 73.02 cents U.S. as of publication.

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Oil prices have also skyrocketed since the conflict began, with the price hovering around US$75 as of publication, and up from less than $64 last week.

“With the Strait of Hormuz effectively shut down, investors are selling currencies from regions that import most of their energy needs,” says Karl Schamotta, chief market strategist at Corpay, in a written note to Global News.

“Both the United States and Canada are net exporters of oil and gas, meaning that they stand to gain economically if [oil] prices remain elevated for a prolonged period.”

At the same time, the U.S. dollar has been rising as a knock-on effect of the Iran conflict.

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“Energy exporting countries are becoming stronger in the current situation,” says Baron.

“We [Canadians] will pay for it in the pump because oil prices are higher, but as the Canadian economy, and in particular, Alberta’s economy, may find itself stronger. The loonie may be a little bit stronger. So all in all, that may be useful for us.“

Before the current Iran conflict, the trade war sparked by U.S. President Donald Trump’s tariff policies gave Canada and other countries pause to reassess their trade relationships.

Prime Minister Mark Carney‘s Budget 2025 includes billions of dollars in spending aimed at growing the Canadian economy, including supporting and expanding Canada’s energy resources, logistics and shipping sectors to help meet increased global demand and to be able to deliver products to customers beyond the U.S.

It will likely take several years for these measures to deliver meaningful results for Canada’s economy, but the Iran conflict means some customers want those resources more quickly.

In Qatar, the energy regulator said it has halted production of LNG amid the Iran conflict. About 20 per cent of the global supply of LNG passes through the Strait of Hormuz, primarily from Qatar, according to the EIA.

Canada has already seen an uptick in requests by other nations for its energy resources in the wake of the Iran conflict.

Global News sent a request to Energy Minister Tim Hodgson’s office Wednesday and asked if Ottawa was getting more calls for Canada’s energy resources since the Iran conflict began on Saturday.

“Yes, we can confirm that the Minister has been receiving calls from countries interested in Canada’s energy exports,” said the minister’s press secretary in a written response.

“Unfortunately, we are not able to disclose which or how many countries have reached out.”

Canada’s first international shipment of LNG was launched last summer, with more shipments leaving since. But there may not be enough LNG or cargo ships available in the short term to meet a sudden spike in demand.

Baron says the issue isn’t whether Canada has enough resources available, but if Canada’s current infrastructure and logistics will allow domestic producers to get those resources to market fast enough.

“We can benefit from it [the Iran conflict], especially from increasing [oil and gas] prices, but this being more limited than one can think of without the logistical constraints of essentially refining the oil and shipping it to the places of dire need now,” says Baron.

“Creating infrastructure is a decades-year project, right? This is not something that you do in a couple of months.”

Baron says Canada may be able to meet some of the demand in the short term by gathering more container ships to export available resources — like those currently avoiding the dangerous Strait of Hormuz.

Still, it may not be a sustainable solution.

“Bringing another ship in, right? those are things that you can do kind of relatively easily in a matter of months, but creating the right infrastructure to sustain, say, a lot of energy shipping between Canada and Japan or China, that’s something that takes decades,” he says.

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