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

As the Iran conflict jeopardizes 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.

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.

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.

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.