Canadian oil producers stand to gain up to C$90 billion ($65.6 billion) in additional revenue if crude prices maintain the elevated levels reached since the Iran war began, positioning the country as a major beneficiary of Middle East turmoil while intensifying calls for new export infrastructure.
Modeling by research provider Enverus estimates Canadian companies will generate an extra C$25 billion to C$30 billion in revenue for every $10 rise in oil prices this year following market disruption 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 substantial boost to an industry seeking to expand exports to Asian markets struggling to source energy supplies amid the Middle East crisis.
Pipeline Constraints Limit Export Capacity
Canada ranks as the world’s fourth-largest oil producer, and Prime Minister Mark Carney has announced plans to boost fossil fuel exports to insulate the economy from a bruising trade war initiated by US President Donald Trump. However, oil and gas producers have limited capacity to expand exports beyond North America due to insufficient pipelines to coastal ports, leaving 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 Strait of Hormuz closure is forcing customers to seek alternative North American supplies. New pipelines should be built enabling producers to respond to Middle East crises to bolster allied energy security and monetise the nation’s natural resources, he argued.
“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 liquefied natural gas to Asia. He called on the government to make “fundamental reform of existing regulations” to encourage companies to build more pipelines.
Production Hits Records as Asian Exports Grow
Oil production in Canada is booming, hitting a record 5.19 million barrels per day in the first half of 2025, up from 5.13 million barrels daily in 2024, according to Canada’s energy regulator. Shares of Canadian oil producers are nearing decade highs, with the four largest producers—Canadian Natural Resources, Suncor Energy, Imperial Oil and Cenovus—rising 40% or more since early 2026.
Canada sends more than 90% of its crude oil to the US, where it sells at a discount due to pipeline constraints and because its high-sulphur, heavy crude requires more complex refining than oil from US shale fields. However, producers are boosting Asian exports 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 Asian export. Sales to China more than quadrupled to 88.7 million barrels last year, according to shipping data analysed by the Baltic and International Maritime Council.
Analysts said geopolitical turmoil in the Middle East has strengthened Canada’s position as a stable energy supplier while enhancing the case for new pipelines to Canada’s west coast serving 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 1 million barrel-a-day pipeline,” said Eric Nuttall, senior portfolio manager at Ninepoint Partners.
Lisa Baiton, president of the Canadian Association of Petroleum Producers, said the Iran conflict highlights how Canada needs to play a much larger role in global energy security. “In the immediate term, Canadian production and our ability to export are 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.”
Geography as Competitive Advantage When Chokepoints Close
Canada’s potential $66 billion windfall from the Iran war perfectly illustrates how geographic luck trumps efficiency when global supply chains rupture—sitting next to the world’s largest energy consumer while being thousands of miles from Middle East conflict zones suddenly matters more than production costs or refining complexity. The irony is that Canada has spent years watching its oil trade at discounts to US benchmarks due to pipeline bottlenecks and heavy crude characteristics, yet those same constraints that frustrated producers during peacetime now protect against the supply disruptions devastating Gulf exporters.
The Trans Mountain pipeline completion in 2024 looks prescient in retrospect, opening Asian export capacity just before the Strait of Hormuz became impassable, though Canada still lacks infrastructure to fully capitalise on current demand despite having production capacity ready to deploy, demonstrating how regulatory delays and environmental opposition to fossil fuel infrastructure during stable periods create genuine energy security vulnerabilities when crises emerge and allied nations desperately need alternative suppliers.
