Because the Iran conflict threatens global oil and gas supplies, Canada’s energy and resource sector may find a way to offset a few of these impacts and see advantages to the economy.
But experts say the challenge is that Canada’s current infrastructure and logistics may not find a way to satisfy this sudden spike in demand.
“This is absolutely a critical point. We [Canada] have the resources, we will produce more oil and gas for that matter, but still our ability to deliver it to the best markets is proscribed,” says Opher Baron, a distinguished professor of Operations Management on the Rotman School of Management.
Iran has effectively closed the vital Strait of Hormuz within the Persian Gulf region by threatening virtually all ships that attempt to go 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 can be wealthy in energy resources, including crude oil and natural gas.
The U.S. is the highest producer of crude oil globally, answerable for 22 per cent of the overall supply, while Saudi Arabia and Russia are second and third, respectively, and every contributes about 11 per cent of the world’s oil, in line with the U.S. Energy Information Administration, or EIA.
Canada is the fourth largest contributor of the world’s crude oil at six per cent. However the Iran conflict could mean that number could also be about to rise.
The Canadian dollar has seen some ups and downs but has remained largely stable through the conflict, as of publication time, and is hovering around 73.02 cents U.S. as of publication.
Oil prices have also skyrocketed because the conflict began, with the value hovering around US$75 as of publication, and up from lower 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.
“Each the US and Canada are net exporters of oil and gas, meaning that they stand to achieve economically if [oil] prices remain elevated for a chronic period.”
At the identical time, the U.S. dollar has been rising as a knock-on effect of the Iran conflict.
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“Energy exporting countries have gotten stronger in the present situation,” says Baron.
“We [Canadians] pays for it within the pump because oil prices are higher, but because the Canadian economy, and specifically, Alberta’s economy, may find itself stronger. The loonie could also be slightly bit stronger. So all in all, which may be useful for us.“
Canada sees uptick in LNG asks
Before the present 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 geared toward growing the Canadian economy, including supporting and expanding Canada’s energy resources, logistics and shipping sectors to assist meet increased global demand and to find a way to deliver products to customers beyond the U.S.
It’ll likely take several years for these measures to deliver meaningful results for Canada’s economy, however 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 worldwide supply of LNG passes through the Strait of Hormuz, primarily from Qatar, in line with the EIA.
Canada has already seen an uptick in requests by other nations for its energy resources within 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 because the Iran conflict began on Saturday.
“Yes, we will confirm that the Minister has been receiving calls from countries inquisitive about Canada’s energy exports,” said the minister’s press secretary in a written response.
“Unfortunately, we usually are not in a position to disclose which or what number of countries have reached out.”
Canada’s first international shipment of LNG was launched last summer, with more shipments leaving since. But there is probably not enough LNG or cargo ships available within the short term to satisfy a sudden spike in demand.
Baron says the difficulty isn’t whether Canada has enough resources available, but when Canada’s current infrastructure and logistics will allow domestic producers to get those resources to market fast enough.
“We will profit from it [the Iran conflict], especially from increasing [oil and gas] prices, but this being more limited than one can consider 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 isn’t something that you just do in a few months.”
Baron says Canada may find a way to satisfy a number of the demand within the short term by gathering more container ships to export available resources — like those currently avoiding the damaging Strait of Hormuz.
Still, it is probably not a sustainable solution.
“Bringing one other ship in, right? those are things you could do form of relatively easily in a matter of months, but creating the best infrastructure to sustain, say, a number of energy shipping between Canada and Japan or China, that’s something that takes many years,” he says.
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