Top oil and gas analyst says conflict in Middle East may benefit Canadian energy sector

The ongoing conflict in the Middle East has shot up the price of oil and changed the outlook for many in the Canadian oil and gas sector and in the government of Alberta.The blockade imposed by the Iranian government at the Strait of Hormuz, a crucial choke point for the global oil industry, has boosted the price of oil outside the Middle East, including in Canada.Since the conflict broke out, the price of West Texas Intermediate, the benchmark for Canadian oil, has jumped from $67 a barrel to close to $77 at the time of writing.This boost to oil prices comes just after the Alberta government published its 2026-27 budget, which had attributed much of the reason for its massive deficit to the stagnating price of oil.On Monday, Alberta Premier Danielle Smith said in a press conference that the ongoing conflict in the Middle East might change the fortunes for the Alberta energy sector.She went on to say that if oil prices continue to rise, then the current deficit may be revised..The feeling that this disruption in global oil supply may tilt the table towards Canada is not just baseless optimism of government officials but is being echoed by private sector analysts as well.Jeremy McCrea is the managing director at BMO Capital Markets and an analyst of the oil and gas industry. He says that the conflict in the Middle East, along with the warming of government support for pipelines, is a positive sign for the Canadian energy sector."What we're clearly seeing is geopolitical risk factor into prices," McCrea said in an interview with the Western Standard."Every time you see a geopolitical event and supply disruption, the world needs to ask itself where it prefers to get its crude oil from," McCrea said, adding that "Canada has been conflict-free and has some of the highest ethical standards in terms of producing oil."He also highlighted how Canada, as a peaceful and predictable country, will only become more attractive to investors as traditional oil-producing countries continue to battle with instability."Canada is known to be a very safe country to invest in, but what's changed in the last year is the federal policies that have been much less antagonistic and, if anything, signalling in the right direction to be more helpful," he continued, highlighting the federal government's outlook towards the oil and gas industry..McCrea admits that even though they haven't seen much of a "hard change in policy" from the federal government, the "shift in attitude" by Prime Minister Mark Carney has "brought in a lot of new investors."He also highlighted the stark contrast in attitudes towards oil and gas from the Trudeau administration compared with the current one."Before, during the Trudeau era, it felt very much that our industry was slowly being shut down through regulations, and now the sentiment feels like there is potential for new pipelines after all," McCrea said.He highlighted this shift in attitude from the feds, alongside the increase in oil prices, as "two things going positive for the sector.".McCrea went on to say that if this conflict in the Middle East goes on for an extended period, then there will, "without a doubt," be more of an appetite for more pipelines and more investors for said pipelines."It's just another reminder why we should have additional pipelines to the coast to supply the world when it needs oil," he said, seemingly echoing what Premier Smith had said about the necessity for more pipelines to the West Coast.He also mentioned that improved oil prices would, obviously, have a positive impact on the provincial budget of Alberta, saying that "any increase in oil prices is beneficial for the Alberta coffers."The signalling from government officials and private sector analysts alike suggests that Canada will selfishly benefit the longer a conflict in the Middle East continues.

Top oil and gas analyst says conflict in Middle East may benefit Canadian energy sector

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