Key Takeaways
- The potential lifting of U.S. sanctions on Russian oil could lead to an oil supply glut, affecting Canadian oil stocks.
- Canadian oil companies such as Canadian Natural Resources, Altagas, Suncor Energy, Tourmaline Oil, and pipeline stocks like Enbridge and Pembina Pipeline have seen their share prices fall.
- TC Energy has spun off its oil pipeline business, reducing its exposure to oil prices and increasing its focus on natural gas pipelines.
- Gold prices and gold stocks like Lundin Gold may rise as countries seek safety in gold due to economic uncertainty and global trade shifts.
- The correlation between gold and oil prices has turned negative since the 2008 Financial Crisis, with gold prices surging while oil prices fall.
Introduction to Canadian Oil Stocks
The Canadian oil stock market is experiencing a significant decline due to the potential lifting of U.S. sanctions on Russian oil. The meeting between U.S. President Donald Trump, Russian President Vladimir Putin, and Ukrainian President Volodymyr Zelenskyy to negotiate the Russia-Ukraine peace talks has sparked uncertainty in the market. If the talks are successful, and sanctions are lifted, India and China can resume buying oil from Russia at a lower cost, leading to an oil supply glut. This has already resulted in a decline in West Texas Intermediate (WTI) crude price from US$60/barrel to US$56.
Impact on Canadian Oil Companies
The decline in oil prices has affected Canadian oil companies, with Canadian Natural Resources’ share price dipping 10% in December. Other oil and gas producers, such as Altagas, Suncor Energy, Tourmaline Oil, and pipeline stocks like Enbridge and Pembina Pipeline, have seen their share prices fall by 6-8% since December 3. However, TC Energy has been an exception, as it has spun off its oil pipeline business, freeing the company from the problematic Keystone pipeline and reducing its exposure to oil prices. This move has increased TC Energy’s focus on natural gas pipelines, making it a more attractive investment option.
TC Energy’s Strategic Move
TC Energy’s decision to spin off its oil pipeline business has been a strategic move, allowing the company to remove its exposure to oil prices. In the first nine months of 2025, TC Energy placed around $8 billion of assets into service, with projects tracking about 15% under budget. The company has also sanctioned approximately $5.1 billion of new projects at an average build-to-sell multiple of about six. Despite TC Energy’s stock trading closer to its all-time high, it is valued lower than Enbridge, with a price-to-earnings ratio of 20.8 compared to Enbridge’s 25.
Gold Prices and Gold Stocks
The uncertainty surrounding the oil market has led to an increase in gold prices, making gold stocks like Lundin Gold an attractive investment option. Gold has traditionally been a safe-haven asset, and its price has surged 58% in 2025 due to tariff-induced inflation and central banks accumulating gold reserves to reduce their dependence on the U.S. dollar. Lundin Gold’s stock has jumped 259% so far in 2025, with one of the lowest all-in sustaining costs (AISCs) of $957 per ounce sold. The company expects its AISCs to increase to $1,060-$1,170 in 2026, still lower than its competitors Kinross Gold and Barrick Gold.
Conclusion and Investment Opportunities
The potential lifting of U.S. sanctions on Russian oil has created uncertainty in the oil market, affecting Canadian oil stocks. However, this uncertainty has also led to an increase in gold prices, making gold stocks like Lundin Gold an attractive investment option. TC Energy’s strategic move to spin off its oil pipeline business has reduced its exposure to oil prices, making it a more attractive investment option. Investors looking to diversify their portfolio should consider gold stocks like Lundin Gold and pipeline stocks like TC Energy, which offer a relatively stable investment option in an uncertain market.