With a possible endgame in sight in the Russian war against Ukraine and tariffs on Canadian energy exports to the U.S. just around the corner, the global energy chessboard is undergoing a massive transformation. How will these shifts alter the global energy landscape? What impact will they have on energy markets? The debate is on.
One of the biggest factors shaping the energy outlook today is the potential for an agreement to end the war in Ukraine. Industry analysts are watching closely.
Bank of America (BofA) estimates that Brent crude oil prices could drop between US$5 and US$10 per barrel if the war ends and Russian barrels return to global markets unsanctioned and unhindered. “Should sanctions relief allow it, we believe Brent crude oil prices could drop between US$5 and US$10 per barrel if Russian barrels suddenly do not need to make a long journey to India or China, and more supply is suddenly made available,” BofA analysts wrote in a note.
A US$10 per barrel drop would lower energy costs for American consumers — aligning with one of U.S. President Donald Trump’s key campaign pledges.
But there’s another side to this equation. U.S. oil producers won’t be eager to ramp up drilling at a price US$10 lower than today’s. That runs counter to Trump’s “drill, baby, drill” mantra.
Meanwhile, Goldman Sachs is warning that the proposed 10 per cent U.S. oil tariff could cost Canadian producers C$10 billion annually. The investment bank estimates that light oil prices could rise by US$0.50 per barrel, making medium crude from the Middle East more attractive to Asian refiners as U.S. Gulf Coast refiners prioritize domestic light crude over imported medium grades.
As a result, Goldman Sachs projects that U.S. consumers would face an annual tariff cost of US$22 billion, while the U.S. government would generate US$20 billion in revenue, Reuters reported.
With U.S. tariffs on Canadian crude all but certain, what can—and should—Canada do? That’s the billion-dollar question, with no easy answers.
The looming tariff war has reignited discussions about reviving Alberta-to-coast pipeline projects. Expanding export infrastructure would help Canada reduce its dependence on the U.S. market, open doors to global buyers, and ensure direct energy supplies to Ontario from Alberta—rather than routing them through the U.S. first.
When much of Canada’s oil pipeline network was originally built, the idea of continental energy security seemed solid. Today, Trump’s tariff threats—and his past remarks about making Canada the 51st state—have shifted the chessboard entirely.
Now, serious conversations are resurfacing about the scrapped pipeline projects. Energy East, which would have delivered Alberta oil east to Ontario and Quebec, and Northern Gateway, which would have connected northern Alberta to Kitimat on British Columbia’s North Coast, are back on the table.
Canada’s Industry Minister François-Philippe Champagne signalled a shift in Ottawa’s stance, acknowledging that a West-East pipeline may now be necessary. “Things have changed … you cannot be in the past,” he told CTV on Feb. 9. “We cannot be dependent.”
Natural Resources Minister Jonathan Wilkinson echoed those concerns, warning that Trump’s tariff threats have exposed a “vulnerability” in Canada’s energy infrastructure.
Public sentiment has also shifted. Support for reviving Energy East has jumped to 65 per cent, up from 58 per cent in 2019. In Quebec, where opposition was strongest, support has climbed from 33 per cent to 47 per cent, according to a recent Angus Reid Institute poll.
The Trans Mountain pipeline expansion, completed last May, has already marked a turning point. Tankers now carry oil sands crude to China, Japan, and other markets—a major shift for Canadian energy exports. But this is just the beginning.
A consensus is emerging: Canada can’t afford further delays in developing energy infrastructure. The country must act now to capitalize on its energy assets.
Period.
Toronto-based Rashid Husain Syed is a highly regarded analyst specializing in energy and politics, particularly in the Middle East. In addition to his contributions to local and international newspapers, Rashid frequently lends his expertise as a speaker at global conferences. Organizations such as the Department of Energy in Washington and the International Energy Agency in Paris have sought his insights on global energy matters.
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