Oil prices have surged again amid the conflict in the Middle East, raising concerns about supply disruptions, inflation pressures and volatility across global equities.
BNN Bloomberg spoke with Martin Roberge, managing director and North American portfolio strategist at Canaccord Genuity, about why energy stocks often track forward oil prices and why investors may want broader exposure to resource equities.
Key Takeaways
- Oil prices have surged amid Middle East tensions, but strategic reserve releases may take months to significantly affect global supply.
- Energy stocks typically track longer-term oil futures rather than spot prices, which helps explain why shares have lagged crude’s recent rally.
- A sustained move higher in forward oil prices could translate into significant upside for energy equities.
- Investors may benefit from diversifying into a broader basket of resource equities including mining, fertilizer and agricultural stocks.
- Canada’s heavy weighting in resource sectors and emerging markets’ commodity exposure could make them key beneficiaries of higher oil and commodity prices.
Read the full transcript below:
ROGER: The price of oil has spiked again, renewing fears the conflict in the Middle East will continue to reduce energy supplies and fuel inflation. You can see there oil is up another 10 per cent, to about US$96. WTI, S&P futures and European equities are seeing some pressure as a result.
Joining us now is Martin Roberge, managing director and North American portfolio strategist at Canaccord Genuity. Martin, thanks very much for joining us.
MARTIN: Thanks for having me.
ROGER: It’s been a bit of a yo-yo week. Oil being released by the IEA doesn’t seem to be having much of an effect.
MARTIN: No. And we have to remember those releases can probably move about 1.5 to two million barrels a day at most. So we’re talking about more than 100 days before we fully see those barrels entering global oil markets.
So obviously we may need to see further announcements of additional releases to move the needle. Because otherwise what we’re seeing is not so much the front contract or the near-term cash market. We know that’s moving higher.
But the risk is that what we call the strip, or the forward curve, is also moving higher. We’re seeing the one-year price of oil now catching up and moving above US$70. If you look back at the Russia-Ukraine conflict, the one-year price of oil peaked at around US$100.
So we’re building those expectations that oil prices could stay higher for longer.
ROGER: In 2022, how long did it take to get to that US$100 a barrel?
MARTIN: About six months. So six months after the military strike, around the summer of 2022, and that was the ultimate peak.
But just as a segue for energy equity investors, some investors are complaining that stocks are lagging the commodity. But stocks never trade in line with the front contract or the cash market. They trade in line with the one-year strip.
So to a certain extent, for those positioned in energy equities, it’s good news. It’s also a reminder to maintain some hedges. Because if we were to see the one-year strip move to US$100, we’re talking about roughly a 40 per cent move in the price of oil and probably a similar move in energy equities.
ROGER: Is this situation worse than the Russian invasion? There was a lot of uncertainty then, but this is very pronounced because we know about 20 per cent of the oil flows through the Strait of Hormuz. Could things move faster this time?
MARTIN: If you removed the situation around the Strait of Hormuz, it would actually be a smaller challenge for oil markets. There are likely not going to be boots on the ground.
And we also know that many emerging markets, especially China, have built enormous strategic reserves.
Very importantly, in 2022 the oil demand-supply equation was totally different. The oil market was undersupplied. This time around, according to the EIA, we’re heading toward a surplus.
We could see about three million barrels per day of surplus by the end of this year and roughly 2.5 million by the end of 2027. So we are in a surplus situation, whereas in 2022 we were in a deficit situation.
ROGER: So there are really two possibilities here. Things calm down and oil returns to a more normal pace, or if the conflict continues, oil could move higher. Would that favour energy stocks?
MARTIN: It could favour energy equities, but at this stage of the cycle investors may want to be smarter and look at a broader basket of resource equities.
The reason is that if oil prices stay higher for longer, other commodities will likely do well or remain strong. That includes fertilizer producers, mining companies and copper producers.
We’re also likely to see a revamping of energy infrastructure in the Middle East. There could be more spending on nuclear energy, infrastructure and renewables.
So we already knew the energy transition would drive demand for various commodities, but the Middle East conflict adds another layer of future demand.
That’s why we think investors should focus not just on energy equities but on a broader hard-asset basket that includes agricultural stocks, mining and gold equities.
ROGER: And this could be a good opportunity to look at Canada then?
MARTIN: Yes, because when you look globally at equity markets, about 40 per cent of the Canadian market is in resource equities. That’s the highest weighting among major global markets, so that could present an opportunity.
Another opportunity, in my view, is emerging markets. These are not the same markets that struggled when oil prices rose in the past.
China now has a strategic reserve of about 1.2 billion barrels in inventories. India is also getting some reprieve and may be allowed to buy Russian oil. And many Latin American emerging markets are net exporters, meaning they benefit from higher oil prices.
We’ve already seen strong performance from emerging markets last year, and we continue to see a gradual re-rating in valuations. These markets are still trading at about a 40 per cent discount to developed markets.
So we also like emerging market equities as a hedge against a prolonged energy crisis.
ROGER: All right, we have to wrap it up there. Martin, thanks very much for joining us.
MARTIN: All right, bye-bye.
ROGER: Martin Roberge is managing director and North American portfolio strategist at Canaccord Genuity.
---
This BNN Bloomberg summary and transcript of the March 12, 2026 interview with Martin Roberge 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.
