If you drove past a gas station in Toronto this morning, you might have done a double-take.
Overnight, prices jumped by six cents, pushing regular gasoline to $1.439 per litre. The spike isn’t a holiday promotion gone wrong — it’s the latest ripple effect from an escalating conflict halfway around the world.
As the Israel–Iran war enters its fifth day, Iran has announced plans to block the Strait of Hormuz — a narrow but vital waterway through which roughly 20% of the world’s oil and natural gas flows. The threat alone was enough to jolt global markets.
Brent crude, the international benchmark, briefly topped US$84 per barrel on Tuesday — a more than US$10 jump since the conflict began. U.S. benchmark West Texas Intermediate rose 4.7% to settle at US$74.56.
For Toronto drivers, the pain at the pump may only be beginning.
Dan McTeague, president of Canadians for Affordable Energy, warned of the initial hike earlier this week. Now he’s forecasting another potential six-cent jump as soon as Thursday.
The reason? The Strait of Hormuz isn’t just another shipping lane — it’s a global energy artery. A blockade wouldn’t disrupt one country’s exports; it would choke nearly one-fifth of the world’s crude supply.
U.S. President Donald Trump posted on Truth Social that the U.S. Navy is prepared to escort tankers through the strait if necessary. But markets appear more focused on the threat of disruption than the promise of protection.
Still, rising oil prices aren’t uniformly bad news. For investors, they often signal a reallocation of value along the energy chain — and two types of Canadian companies are moving into focus: low-cost producers and pipeline operators with pricing power.
In volatile times, the first question investors ask is: Can this company withstand the swings?
Canadian Natural Resources offers a compelling answer.
The Calgary-based energy giant holds a diversified portfolio of assets across Western Canada, the North Sea, and offshore Africa. Its key advantage lies in its low-risk, high-value reserve base — more than 5 billion barrels of oil equivalent, with a reserve life index of 32 years, the second-largest among global peers.
Thanks to efficient operations and disciplined cost management, CNQ has driven down its breakeven levels. That means it can remain profitable even if oil prices pull back — and when prices rise, the upside flows directly to the bottom line.
For income-focused investors, CNQ’s track record is hard to ignore: 25 consecutive years of dividend increases, with a 21% annualized growth rate. The current quarterly dividend of $0.5875 per share yields 3.89% — a rare combination of growth and income in a cyclical industry.
The balance sheet is equally sturdy. CNQ boasts a debt-to-adjusted EBITDA ratio of just 0.9 and $4.3 billion in liquidity. That financial flexibility allows it to pursue growth even when rivals pull back. This year, the company plans to invest $6.4 billion in capital expenditures to expand production — a vote of confidence in its long-term outlook.
If CNQ is a bet on the price of oil, Enbridge is a bet on its movement.
As North America’s energy infrastructure heavyweight, Enbridge operates an extensive network of crude oil and natural gas pipelines, along with three U.S. natural gas utilities and a growing renewables portfolio. But what truly sets it apart is its revenue model: approximately 98% of adjusted EBITDA comes from long-term take-or-pay contracts or regulated assets, with about 80% of that cash flow indexed to inflation.
Translation: Whether oil prices soar or slump, as long as energy flows through the pipes, Enbridge collects its toll. And when inflation pushes costs higher, rates adjust accordingly. It’s a classic defensive play with built-in inflation protection.
For dividend seekers, Enbridge is almost in a league of its own: more than 70 consecutive years of dividend payments, with 31 straight years of increases. The stock currently offers a forward yield of 5.22% — a standout in today’s low-yield environment.
Growth isn’t off the table, either. Management has identified $50 billion in secured growth opportunities through the end of the decade and plans to invest roughly $10 billion annually to advance them. As these projects come online, the company expects adjusted EBITDA, earnings per share, and distributable cash flow to grow at a mid-single-digit clip over the next several years.
With $10.8 billion in liquidity at year-end, Enbridge has the firepower to execute.
