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Former Deputy Premier calls for Canadian energy strategy as oil markets react cautiously to rising tensions
The world is watching closely after the United States bombed suspected nuclear sites in Iran on Saturday night, prompting fears that tensions in the Middle East could escalate into full-scale conflict.
The U.S. dollar strengthened following the strike, which many global leaders warn could further destabilize an already volatile region. Market reaction has remained relatively muted since Israel’s initial strike on Iran earlier this month. While the S&P 500 has declined over the past two weeks, it remains just three per cent below its February record high. A Bloomberg index tracking the U.S. dollar has risen less than one per cent since the June 13 attack.
West Texas Intermediate crude is trading in the mid to high US$70 range. Former Alberta deputy premier Thomas Lukaszuk said the unfolding situation could create a rare opportunity for Canada to step into a larger role in global energy markets.
“If you consider oil as blood, you need a right match,” Lukaszuk said in an interview. “Refineries are specific to a very specific type of oil. Refineries that process Iranian oil may not be able to process WCS.”
Lukaszuk noted it would be difficult to retool Eastern Canadian refineries, such as those operated by Irving Oil in New Brunswick, to handle heavier Alberta crude. However, he said the moment calls for national leadership and strategic investment.
“There has to be some form of major national investment into building both pipeline and refineries in the east to subsidize the construction of pipelines,” he said.
When asked about the price of oil, Lukaszuk predicted it could hit US$100 per barrel if Iran follows through on its threat to close the Strait of Hormuz, a critical passage for Middle Eastern oil exports.
In the short term, gas prices are expected to stay relatively stable. Patrick De Haan, an analyst with GasBuddy.com, said drivers might see a modest increase at the pump but not a significant spike.
For now, global markets remain on edge, awaiting Iran’s next move.
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