The long term demand outlook for Canadian oil and gas is strong despite the recent plunge in crude prices and market upheaval, said the head of the country’s biggest oil and gas advocacy group.
“The entire planet is dealing with the current market volatility and certainly oil and gas is no exception to that,” Lisa Baiton, president and CEO of the Canadian Association of Petroleum Producers, said Tuesday.
“But I would say generally speaking … we’re looking through that and seeing that the fundamentals for Canadian oil and gas are still very, very strong.”
West Texas Intermediate crude prices have lost about US$10 over the last week to hover around US$60 per barrel after U.S. President Donald Trump unleashed a new wave of tariffs and the Organization of Petroleum Exporting Countries announced a May production increase.
Despite the trade strife, the U.S. will always be a major customer for Canadian energy, Baiton said from Toronto, where the BMO CAPP Energy Symposium is being held this week.
She added that growth in artificial intelligence data centres, which are known for being voracious energy users, is expected to drive demand well into the future.
Tourmaline Oil Corp., which is active in northeastern B.C. and western Alberta, has been feeling the near-term pain from the crude price drop, said CEO Mike Rose.
“Our stock price has gone down and that doesn’t make shareholders happy,” he said.
“Of course, we’re concerned about it. What we don’t know at this point is, is this a short-, medium- or long-term issue and that will dictate what our response would be.”
The timing of the downturn works in Tourmaline’s favour, as drilling in Western Canada normally takes a pause during the spring when the ground is still too muddy for rigs to operate — “spring breakup” in industry parlance.
“We’ve got a bit of a breather here naturally,” Rose said, adding the second-quarter is when the company may re-evaluate its capital plans for 2025.
That would coincide with one bright spot on the horizon for Tourmaline, whose production tilted toward natural gas — the startup of Canada’s first liquefied natural gas terminal on the B.C. coast mid-year.
Rose said he expects a “dramatic effect” on the pricing of western Canadian natural gas once cargoes are able to depart from LNG Canada in Kitimat, B.C., for sale in Asian markets.
“We’re very excited. We’re right at the cusp where it’s finally going to take off — and it is really going to take off.”
On the oilsands front, a research report from Enverus on Tuesday said expansions to existing projects that use steam wells instead of mining for extraction are viable with low oil prices, but brand new ones would need stable prices of US$80 or higher to be greenlit.
A note from S&P Global Commodity Insights says if WTI was to plunge to US$50 per barrel, there could be a decline of one million barrels a day of U.S. onshore production over the course of a year.
CAPP is calling for a “major policy reset” to enable development of Canada’s oil and gas resources, including the repeal of environmental review legislation some industry leaders say effectively stops any major projects from moving ahead.
“There’s been a wake-up call post the election of President Trump that the resources that Canadians are blessed with are the cornerstone not only to our economic security, but to our national security and to our sovereignty,” Baiton said.
“It’s not just about current market volatility and today’s economy. This is about really shaping Canada’s future for generations.”
This report by The Canadian Press was first published April 8, 2025.
Lauren Krugel, The Canadian Press
