{"id":2170,"date":"2026-08-03T10:43:22","date_gmt":"2026-08-03T14:43:22","guid":{"rendered":"https:\/\/advisor.wellington-altus.ca\/smokinbulls\/?p=2170"},"modified":"2026-08-03T10:48:34","modified_gmt":"2026-08-03T14:48:34","slug":"our-continuing-dependence-on-oil-will-the-energy-landscape-shift","status":"publish","type":"post","link":"https:\/\/advisor.wellington-altus.ca\/smokinbulls\/2026\/08\/03\/our-continuing-dependence-on-oil-will-the-energy-landscape-shift\/","title":{"rendered":"Our Continuing Dependence on Oil: Will the Energy Landscape Shift?"},"content":{"rendered":"\t\t
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Our Continuing Dependence on Oil: Will the Energy Landscape Shift?<\/h3>

The conflict with Iran served as an abrupt reminder of energy\u2019s central role in global order. In the spring, the Strait of Hormuz exposed the risks of routing roughly 20 percent of global supply through a single chokepoint. The resulting disruptions not only drove fossil fuel prices sharply higher but also reinforced a consequence that extends well beyond economics: energy security is inseparable from national security.<\/p>

Canada learned this lesson in the 1970s during a period of similar external supply shock. Amid bell-bottoms and a Beatles\u2019 breakup, that decade was defined by stagflation: high inflation, unemployment and weak growth. A major contributor was the 1973 oil embargo, with supply shocks that drove up global energy prices. Canada largely avoided the severe shortages seen in the U.S., but was still confronted with significant economic strain. Ottawa responded with price controls and, later, the National Energy Program to stabilize supply and reduce exposure to global shocks.<\/p>

The legacy of that strategy is felt today, as we are considerably less vulnerable to energy shocks than in the past. Not only are we less energy intensive than in the 1970s, but Canada is now a net exporter of oil and natural gas, which provides a meaningful degree of insulation.1<\/sup>\u00a0As such, the events in the spring raised the question:\u00a0 why did gasoline prices rise so significantly at home? Canada does not import oil through the Strait of Hormuz, and most crude oil transiting that route is destined for Asian markets. Nevertheless, oil is priced globally. As a result, local prices respond to shifts in worldwide supply and demand regardless of where disruptions originate. When global oil prices rose by roughly 60 percent in April alone, those increases fed directly into domestic gasoline prices.<\/p>

The conflict also prompted a broader question: Will the issues exposed by control over the Strait of Hormuz accelerate a broader energy shift? Indeed, recent events have prompted many nations to revisit their energy strategies, with renewed interest in alternative energy sources aimed at reducing dependence on imported fossil fuels. Yet expectations of a rapid decline in fossil fuel use may be optimistic. Even as efficiency improves, total oil demand has proven remarkably resilient.<\/p>

\"\"A key constraint is the efficiency paradox, often referred to as the Jevons effect. Efficiency improvements lower the cost of using a resource, but those lower costs tend to increase consumption through substitution and income effects. William Jevons observed this phenomenon in the 19th century when improvements in steam engine efficiency led to greater \u2014 not lower \u2014 coal consumption. Today, global oil consumption now exceeds 100 million barrels per day, up from roughly 60 million a half-century ago, while the world remains 80 percent dependent on fossil fuels.2, 3<\/sup><\/p>

\"\"Structural demand resilience is only one side of the equation; supply-side coordination may also be beginning to shift. The conflict may have been a catalyst for reshaping global energy dynamics. The UAE\u2019s decision to leave OPEC in the spring, departing the cartel it joined in 1967, may signal emerging fractures in traditional alignments. As a key producer with significant spare capacity, its departure could reduce OPEC\u2019s ability to coordinate output and influence prices.<\/p>

Perhaps most notably, in an era of heightened geopolitical uncertainty and renewed trade tensions, stability and reliability are commanding a growing premium alongside resource abundance. Canada\u2019s role as a stable and proximate energy supplier reinforces its structural importance in global energy markets. This position should not be discounted, especially in an increasingly fragmented world. As one market observer noted at the height of the conflict, \u201coil and gas aren\u2019t the only two commodities missing from world markets\u2026 so are trust and predictability.\u201d Against this backdrop, Canada\u2019s position has rarely looked stronger.<\/p>

1. Energy intensity = energy consumed per unit of GDP.
2. https:\/\/www.worldometers.info\/oil\/
3. https:\/\/www.iea.org\/reports\/world-energy-outlook-2024\/pathways-for-the-energy-mix<\/pre>
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The conflict with Iran served as an abrupt reminder of energy\u2019s central role in global order. In the spring, the Strait of Hormuz exposed the risks of routing roughly 20 percent of global supply through a single chokepoint. The resulting disruptions not only drove fossil fuel prices sharply higher but also reinforced a consequence that extends well beyond economics: energy security is inseparable from national security.<\/p>\n","protected":false},"author":68,"featured_media":1613,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_oasis_is_in_workflow":0,"_oasis_original":0,"_oasis_task_priority":"","_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[27],"tags":[258,260,67,266,259,144,79],"class_list":["post-2170","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles","tag-capital-gains","tag-financial-freedom","tag-financial-planning","tag-september","tag-wealth-advisory","tag-wealth-management","tag-wealth-planning"],"_links":{"self":[{"href":"https:\/\/advisor.wellington-altus.ca\/smokinbulls\/wp-json\/wp\/v2\/posts\/2170","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/advisor.wellington-altus.ca\/smokinbulls\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/advisor.wellington-altus.ca\/smokinbulls\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/smokinbulls\/wp-json\/wp\/v2\/users\/68"}],"replies":[{"embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/smokinbulls\/wp-json\/wp\/v2\/comments?post=2170"}],"version-history":[{"count":8,"href":"https:\/\/advisor.wellington-altus.ca\/smokinbulls\/wp-json\/wp\/v2\/posts\/2170\/revisions"}],"predecessor-version":[{"id":2179,"href":"https:\/\/advisor.wellington-altus.ca\/smokinbulls\/wp-json\/wp\/v2\/posts\/2170\/revisions\/2179"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/smokinbulls\/wp-json\/wp\/v2\/media\/1613"}],"wp:attachment":[{"href":"https:\/\/advisor.wellington-altus.ca\/smokinbulls\/wp-json\/wp\/v2\/media?parent=2170"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/smokinbulls\/wp-json\/wp\/v2\/categories?post=2170"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/smokinbulls\/wp-json\/wp\/v2\/tags?post=2170"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}