A potential game-changer is unfolding in the energy markets, and it's all eyes on Canada. The ongoing Iran conflict has sent oil prices soaring, creating an unprecedented opportunity for Canada to step up as the world's most reliable oil supplier.
As global markets brace for an extended Middle East crisis, the impact on energy markets is a double-edged sword. While oil and gas bulls are rejoicing, some experts argue that Canada stands to gain even more. Eric Nuttall, a senior portfolio manager at Ninepoint Partners in Toronto, sees the Middle East conflict as a "massive opportunity" for Canada to showcase its stability and security as an oil supplier.
But here's where it gets controversial: Nuttall believes the sudden loss of Iranian supply and the closure of the Strait of Hormuz is a "worst-case scenario" for investors. He argues that the market's typical response of selling spikes in oil prices may not apply in this scenario. And this is the part most people miss: Canada's unique position as a stable energy supplier with vast reserves in the oil sands and Clearwater formation.
The Clearwater Formation in Alberta holds an estimated 70 billion barrels of high-viscosity heavy oil and bitumen reserves, with production expected to reach nearly 400,000 bbl/d by 2031. Nuttall has been actively adding Canadian energy stocks to his portfolio, recognizing the increased importance of "security of supply." He calls on the Canadian Parliament to approve new export pipelines to address the global supply-demand mismatch.
So, who are the top Canadian oil and gas stocks to watch in 2026?
#1. Peyto Exploration & Development Corp. (OTCPK:PEYUF): With a market cap of $3.9 billion and a forward dividend yield of 5.19%, Peyto focuses on unconventional natural gas, oil, and natural gas liquids. Operating in Alberta's Deep Basin, Peyto boasts a low-cost structure and integrated infrastructure, positioning it as one of Canada's lowest-cost natural gas producers. The company's strong bottom-line growth and hedging strategies have led to a 29% increase in funds from operations in Q3 2025.
#2. Cenovus Energy (NYSE:CVE): Cenovus is an integrated oil and natural gas company with a market cap of $42 billion and a forward dividend yield of 2.6%. Based in Calgary, the company operates across Canada, the U.S., and the Asia Pacific region. Cenovus reported record oil sands production in Q4 2025 and expects a 4% year-over-year production increase in 2026. The acquisition of MEG Energy is expected to deliver significant annual synergies, growing from $150 million in 2026 to over $400 million by 2028.
#3. Suncor Energy (NYSE:SU): Suncor is a leading Canadian integrated energy company with a market cap of $68.6 billion and a forward dividend yield of 3.0%. Specializing in oil sands production, offshore and conventional exploration, and petroleum refining, Suncor operates major assets in North America and is expanding into lower-carbon power. With a solid track record of capital returns and an integrated business model, Suncor offers a hedge against oil price volatility and is actively reducing share count through buybacks and dividend increases.
As the Iran conflict continues to unfold, Canada's role as a reliable oil supplier is gaining attention. The question remains: Will Canada seize this opportunity to solidify its position in the global energy market? What do you think? Share your thoughts and opinions in the comments below!
