Middle East supply cutoff crisis triggers a "rush to order" wave! Canada and Norway are aggressively grabbing energy windfalls

Ask AI · How the Middle East crisis is reshaping the global energy power landscape?

Fighting in the Middle East has caused unprecedented disruptions to the global energy supply chain, and at the same time, Canada and Norway are rubbing their hands in anticipation, ready to reap a huge “energy windfall”!

Canada and Norway are racing to capitalize on the Middle East energy crisis by increasing oil and gas development and exports, supplying their allies in Asia and Europe.

Canada’s energy minister Tim Hodgson said that the world is facing the largest-scale energy supply disruption in history, and that the country’s producers are in an ideal position to meet the growing demand for alternative supplies.

“It’s been a long time since it was so clear how important energy security is to our national security and the security of our allies. Therefore, this is Canada’s moment in the spotlight,” Hodgson said in an interview at the Cambridge Energy Week conference in Houston.

He stated that the war in Iran has presented Asian countries with a crisis—one essentially the same as the crisis that shook Europe after the Russia-Ukraine conflict in 2022. At that time, soaring energy costs threatened to shut down large parts of the economy. “The world is in despair. They urgently need a reliable supplier.”

The CEO of Norway’s largest oil and gas company, state-owned Equinor, also expressed agreement with Hodgson’s view in another interview. CEO Anders Opedal said, the company plans to increase its international production by 25% by 2030, reaching nearly 900,000 barrels per day, and is preparing to “give the green light” to expansion projects.

“We are working to secure approval for the Johan Sverdrup expansion project next year,” Opedal said, referring to one of the largest oil fields in the world located in the far north. He added that resources in the Barents Sea north of Norway are “crucial” to Europe’s energy security.

He said: “This project can serve as a diversification option outside the Middle East—at least for Europe and some other countries.”

Oil majors have already warned that a fuel crisis could sweep the globe.

Shell CEO Wael Sawan said, as the war in the Gulf region begins to exert “severe physical pressure” on the entire energy market, countries may need to start reducing oil and gas consumption.

“That’s a chain reaction…” he said. “South Asia is hit first, then it spreads to Southeast Asia and Northeast Asia. And once we reach April, the impact on Europe will be even greater.”

Before the United States and Israel launched attacks on Iran last month, Equinor was already operating at full capacity. The conflict brought an unexpected windfall, as crude prices have surged 30% since Tehran blocked the Strait of Hormuz, cutting off roughly one-fifth of the world’s oil and liquefied natural gas supplies.

Norway’s substantial revenues have caused tensions with neighboring countries, with politicians in Sweden and Denmark calling on Oslo to be more generous in supporting Ukraine.

A minister from a regional country recently said after hostilities broke out in the Gulf: “Norway hasn’t done enough. It’s made such a big windfall, so it should be generous, not sit back comfortably thinking that this money is just what it was supposed to earn.”

Norway’s oil industry hopes that a new wave of anxiety over energy supply will prompt the EU to reconsider its ban on Arctic drilling.

Middle East turmoil has driven oil prices above $100 per barrel, giving a boost to Canadian high-cost energy producers and encouraging developers to accelerate more project plans.

Research firm Enverus estimates that if crude prices remain at levels since the outbreak of the Iran war, Canadian oil producers will gain an extra C$90 billion (about $65 billion) in windfall profits this year.

Hodgson said Canada’s liquefied natural gas industry is also on the verge of rapid expansion. This is happening as the Iran conflict engulfs Qatar, whose LNG facilities have been damaged, forcing its export capacity to effectively halt for the next few years.

He pointed out that projects underway or planned in western Canada could make the country the world’s fourth-largest natural gas exporter. A Canadian LNG project in British Columbia, supported by Shell, began production last year. By 2030, the country’s total export volume will reach 50 million tons annually—almost two-thirds of Qatar’s pre-war capacity.

Canada’s push for new fossil fuel export initiatives comes as Prime Minister Mark Carney seeks to find new markets for the country’s energy beyond the United States after President Trump’s trade war moves.

Hodgson said the federal government supports building pipelines to expand exports. Recently, the federal government signed a memorandum of understanding with Alberta’s provincial government to open a new export route to the Pacific coast. Alberta is an inland province and home to Canada’s large oil sands projects.