Oil surged the most in four years after tanker traffic halted through the Strait of Hormuz, as escalating conflict involving Iran threatened global energy flows and pushed crude prices sharply higher.
BNN Bloomberg spoke with Andrew Pyle, senior investment advisor and portfolio manager at CIBC Wood Gundy, who said a prolonged conflict could drive oil toward US$100 a barrel, reignite inflation and increase the probability of a U.S. recession, while boosting Canadian energy stocks.
Key Takeaways
- Oil prices surged on fears the Strait of Hormuz disruption could constrain roughly a fifth of global oil supply distribution.
- Some analysts see crude potentially reaching US$100 a barrel if the conflict persists for several weeks.
- Higher energy costs could reverse recent progress on inflation and raise the odds of a U.S. economic downturn.
- European natural gas prices spiked, highlighting broader risks to LNG supply and energy affordability.
- Canadian energy producers may benefit from higher crude prices due to limited direct exposure to Middle East shipping routes.
Read the full transcript below:
ROGER: And of course, all this is on oil surging the most in four years because tanker traffic halted through the Strait of Hormuz and the escalating conflict in the Middle East, all of that threatening supplies. Here to talk about this and the morning’s markets is Andrew Pyle, senior investment advisor and portfolio manager at CIBC Wood Gundy. Andrew, thank you, as always, for joining us. Let’s start with oil. It’s going pretty much where everybody expected it to go today, it seems.
ANDREW: Yeah, pleasure being here, Roger. This is a different risk than we saw with Venezuela. Analysts are looking at this as being a more protracted affair with respect to Iran. And now what we’re seeing is a spreading out across the Middle East, which is obviously going to have a positive impact on the price of oil. Some analysts, as you mentioned this morning, are looking at the potential for crude to get to $100 a barrel. Obviously, there’s nobody out there that can rule that out, especially if this conflict continues for a week or four weeks, as Trump has alluded to.
ROGER: And I imagine, I mean, Iran makes up, I think, about five per cent of world oil, but it’s the strait that is the big thing, isn’t it? Keeping that open?
ANDREW: Exactly. It’s the Strait where we see the passage of a fifth of the world’s oil production in terms of supply distribution. It’s not just Iran. So we’re seeing that direct impact on crude. We’re also seeing it with respect to, for example, gas prices in Europe because, again, a lot of LNG production is in that region. And two of those suppliers basically had to shut down amid the conflict and the threat levels in that region. So it’s going to hit crude, it’s going to hit natural gas, I think, as we work our way through this.
ROGER: Yeah, did I not see Norwegian natural gas was just jumping?
ANDREW: I mean, this morning we saw a 45 per cent spike in that price. So that just tells you the sensitivity of supply in Europe to production in the Middle East. It’s no longer just an Iranian oil production issue. It’s now refineries and tanker shipments through the Strait.
ROGER: And the President, President Trump, has said this could go on. There could be more attacks. It could go on for weeks, maybe less. I mean, it all depends on, I guess, what happens with Iran itself, their new government. How long can this kind of go before it’s already worrisome, but then it really gets worrisome?
ANDREW: Well, I think a lot of this will depend on how strong Congress wants to be in the face of this. Because, again, keep in mind we’re dealing with a midterm election year in the States. Affordability has been one of the key themes going into these elections. Well, if oil is going to go to $100 a barrel, we kind of know what’s going to happen to gasoline prices in the States, and therefore we’re going to go backwards on affordability. So it’ll be interesting to see how much back pressure Congress applies.
Again, coming back to the affordability issue, we’ve been talking about whether the U.S. can reaccelerate in terms of the economy. Can we see this in a low-inflation environment? Can interest rates decline further? Well, a lot of that gets thrown out the window if we’re talking about a four-week affair where now the inflation outlook is going to be completely up in the air and we could see inflation coming back. So this has repercussions beyond what we’re just seeing in the markets. I would argue it has repercussions in terms of what we see the consumer doing this year and what happens to the overall level of inflation.
ROGER: And you feel this could push the U.S. into recession?
ANDREW: I think the probabilities go up if we’re at this for four weeks. If you and I are talking about this at the end of March with oil prices up where some analysts think they could be, it would be naive to think that the U.S. economy could just shrug this off.
The interesting thing to keep in mind is that before we came into the weekend, we were talking about something called AI and what impact that may have on labour markets and ultimately consumption. That was before we even got into this. So now you’re layering a risk on top of that. So yes, I think the probability of a setback in the economy moves higher the longer we’re at this.
ROGER: And then what about Canada relative to that?
ANDREW: Canada is not going to be immune from this. Obviously, we’re talking about it this morning in terms of airlines and travel. We’re still sensitive to what happens in the U.S. economy, so we don’t get away with this with no impact.
But I would argue — and we’re going to see this in the markets this morning — that the TSX is going to have more resilience than the markets in the States, simply because we still have a very strong energy sector and a well-capitalized financial sector. I think that ultimately keeps the Canadian equity story above what we’re seeing in the States in terms of where we want to be positioned.
ROGER: And where do you go with this? When you’re looking at all this, what are you doing right now? Who are you looking at?
ANDREW: Right now we’re looking at the energy sector in terms of where we want to be, especially in Canada. One thing to keep in mind when we talk about oil supply is that producers with a high degree of sensitivity to that region in terms of getting output out are going to benefit from higher prices, but they’re also going to be hit by weaker volumes.
Compare that to Canada, where a lot of our energy producers are not wedded to what is happening in the Strait. We ship oil by pipeline, and we can ship oil from either side of the country. So I think the Canadian energy patch is where we’re focused right now. Unless this becomes a protracted affair that drags down global economic growth to the point where it hits Canada, we’re still comfortable here.
ROGER: Yeah, and CNQ is one of the ones you’re liking right now.
ANDREW: CNQ is one of those Fort Knox stories for Canada in the energy patch. It will benefit from higher prices for crude. It doesn’t have the same sensitivity to shipments through that region. You’ll love its production in Western Canada and the North Sea, which is one of the reasons we like the stock. And of course, it pays a handsome dividend.
ROGER: All right. And looking the other way, this is just — we’re pulling in a stock you’re not liking so much right now, Western Union.
ANDREW: Again, getting back to my earlier comment, the AI story has not gone away just because the U.S. attacked Iran over the weekend. That displacement thesis of companies that are going to be negatively impacted by the usage of AI — whether it’s mid-level software companies or, in the case of Western Union, a company that has benefited from the ease of transferring money — is still in play.
Now it’s going to be facing competition from other firms in the financial sector that can use AI tools to generate that transfer of money more efficiently. So I think we’re going to see some margin compression with respect to Western Union. It’s a stock that we don’t think we want in the portfolio today.
ROGER: Now, are they not — I mean, I assume they were looking at AI. Would they not be starting to implement it as well and, because they do this for a living, stay ahead of anybody else?
ANDREW: Absolutely. They have no choice but to do it. The question becomes which firms can deploy relatively more capital to these technologies and benefit from that. I think that’s where Western Union probably is not going to stand up as well against some of the larger titans in the financial sector, whether in the States or globally.
ROGER: I wonder if they’ll have to go back to ponies, riding the pony?
ANDREW: They may have.
ROGER: All right, Andrew, thank you, as always, for joining us.
ANDREW: Thank you, Roger. My pleasure.
ROGER: Andrew Pyle is a senior investment advisor and portfolio manager at CIBC Wood Gundy.
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This BNN Bloomberg summary and transcript of the March 2, 2026 interview with Andrew Pyle are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
