Stay informed with free updates
Simply sign up to the Oil & Gas industry myFT Digest — delivered directly to your inbox.
Canadian oil producers stand to receive a windfall of up to C$90bn ($65.6bn) if crude prices maintain the levels they have hit since the Iran war started.
Modelling by Enverus, a research provider, estimates Canadian companies will generate an extra C$25-C$30bn in revenue for every $10 rise in oil prices this year following the market turmoil caused by US and Israeli attacks on Iran.
West Texas Intermediate, the US benchmark, has surged to just over $98 on Friday from $67.02 on February 27, delivering a huge boost to an industry which is seeking to expand exports to Asian markets struggling to source energy supplies due to the Middle East crisis.
Canada is already the world’s fourth-largest oil producer, and Prime Minister Mark Carney has announced plans to boost fossil fuel exports to insulate its economy from a bruising trade war initiated by US President Donald Trump. But oil and gas producers have limited capacity to expand exports beyond North America due to a lack of pipelines to coastal ports, which has left them almost entirely reliant on US customers.
François Poirier, chief executive of TC Energy, one of the largest pipeline operators in Canada and the US, said the closure of the Strait of Hormuz was forcing customers to seek alternative supplies from North America. New pipelines should be built to enable producers to respond to crises in the Middle East to bolster the energy security of Canada’s allies and monetise the nation’s natural resources, he said.
“The resource is definitely there. Producers are definitely capable of ramping up production to that level. And it’s just a question of responding to what is a time-bound opportunity,” said Poirier, adding that Canada has the potential to become the largest supplier of LNG to Asia.
He called on the government to make “fundamental reform of existing regulations” to encourage companies to build more pipelines.
“We would like to see the underlying regulatory environment get simplified, get streamlined and timelines accelerated, because that is what will be required to get capital to flow to Canada,” said Poirier.
Oil production in Canada is booming and hit a record 5.19mn barrels per day in the first six months of 2025, up from 5.13mn b/d in 2024, according to Canada’s energy regulator. Shares of Canadian oil producers are nearing decade highs and shares of the four largest producers — Canadian Natural Resources, Suncor Energy, Imperial Oil and Cenovus — have risen by 40 per cent or more since the start of 2026.
Canada sends more than 90 per cent of its crude oil to the US, where it is sold at a discount due to pipeline constraints and because its high-sulphur, heavy crude requires more complex refining than oil pumped from US shale fields.
But oil producers are boosting exports to Asia following completion of the Trans Mountain Expansion pipeline in May 2024, which enabled crude to flow from Alberta’s oilfields to the west coast for export to Asia. Sales to China more than quadrupled to 88.7mn barrels last year, according to shipping data analysed by the Baltic and International Maritime Council.
Analysts said the geopolitical turmoil in the Middle East had strengthened Canada’s position as a stable energy supplier while enhancing the case to build new pipelines to Canada’s west coast for Asian markets.
“This war is yet another screaming example of why it’s in Canada’s national priority and why the global oil market needs Canada to build a new 1mn- barrel-a-day pipeline,” said Eric Nuttall, a senior portfolio manager at Ninepoint Partners.
Lisa Baiton, president of the Canadian Association of Petroleum Producers, said the conflict in Iran highlighted how Canada needed to play a much larger role in global energy security.
“In the immediate term, Canadian production and our ability to export is not impeded in any way, therefore producers are receiving higher prices today. Longer term, the events in the Middle East reinforce Canada’s position as a safe destination for energy investment and a reliable trading partner,” she said.
Research published by ATB Economics and Studio.Energy last week estimated that expanding Canada’s oil export infrastructure by 1.5mn b/d — an increase of nearly one-third — could add an average C$31.4bn to national real domestic product each year over the next decade.
“That represents a 1.1 per cent increase in Canada’s real GDP — a meaningful boost considering this country has struggled to raise GDP per person for more than a decade,” said the report.
But the RBC noted this month that if oil remained above $100 a barrel, headline inflation could rise by three-quarters of a percentage point to peak at about 3 per cent in Canada and 3.5 per cent in the US this year.