Canadian energy producers carried the S&P/TSX Composite on Friday as Brent settled at US$109.86, its highest close since May 19. Canadian Natural Resources rose 3.2%, Imperial Oil 2.9%, and Suncor and Cenovus 2.7% each, while Enbridge added 2.3%, according to Trading Economics. The same barrel that lifts producer earnings is lifting gasoline prices, which were 27.8% above last year in the September CPI.
Hormuz Is Still the Price
The driver is physical. At least nine commercial ships have come under attack near the Strait of Hormuz since Oct 11, and Iran sank the container ship GFS Pride on Oct 14, according to CNBC. Three seafarers were injured and two went missing, the International Maritime Organization reported. Houthi militants also fired missiles at Saudi Arabia on Friday.
Kpler data show crude exports through the strait at 9.4 million barrels per day in the week to Oct 14, about 70% of the prewar average, after touching prewar levels in September. Iran has said its proposal to reopen the strait remains on the table, and Gulf News describes it as conditional, tied to lifting the US blockade of Iranian ports and removing sanctions. There is no agreed framework.
Brent has closed above US$100 a barrel in every session since Oct 1 and finished the week at its highest settlement since May 19, while Hormuz shipping stayed at roughly 70% of prewar volume.
Kpler data put crude exports through the Strait of Hormuz at 9.4 million barrels per day in the week to Oct 14, about 70% of the prewar average. The US sanctions waiver on Russia was signed after Friday close.
Russia Offers Barrels, Not Passage
President Trump signed an order on Friday evening suspending most sanctions and the proposed secondary tariffs on buyers of Russian oil, days before the sanctions were due to take effect. It followed his claim of a Russia-Ukraine energy ceasefire, which neither Kyiv nor Moscow acknowledged. Brent fell 2.08% to US$107.57 early Monday as traders priced more Russian fuel exports.
The reaction was small because the waiver does not touch the constraint. Analysts quoted by Oil and Gas Middle East noted that it does little to address the supply disruption in Hormuz, where tanker attacks continue. Brent was near US$108 in Monday trading, still about 50% above the roughly US$72 it traded at in late February.
How It Reaches Canadian Portfolios
The chain runs through three channels. The first is equities: energy was the TSX leadership group in the week the technology sector sold off, and the index added 1.4% on the week while Shopify, Celestica and Constellation Software fell. The second is inflation: gasoline at 27.8% above last year lifted headline CPI to 3.1% in September, although core measures eased.
The third is the Bank of Canada. Governor Tiff Macklem said on Oct 16 that the longer energy prices stay elevated, the harder it gets to keep looking through them, and banking stocks were subdued after the remarks. An oil shock that persists long enough turns from a price level event into a rate decision, which is why the oil price matters to a portfolio with no oil in it.
Base Case and Tail Risk
The base case is a market that holds between US$100 and US$110 while Hormuz flows stay near 70%, with headline risk from every statement on the Iranian proposal. The Russian waiver trims the top of that range but does not remove it. Energy leadership on the TSX persists while that holds.
The upside tail is further escalation, and analysts at EnergyNow flagged renewed damage to the Saudi East-West Pipeline or the Yanbu export terminal as a trigger that could quickly reverse any decline. Brent traded as high as US$126.41 within the past 52 weeks, according to Investing.com. The downside tail is a credible reopening timetable, which EnergyNow said could remove considerably more of the geopolitical premium. Energy-heavy Canadian portfolios carry the second risk as much as the first.