'Horrible war in Iran' could be a benefit to Canadian oil: senior portfolio manager

追加: 2026-05-30

[00:00:00]And oil prices are higher this morning as investors wait to see whether talks between the US and Iran will translate into a tangible peace deal. Our next guest says resolutions to the conflict would be a short-term negative for oil prices, but he is still bullish on Canadian energy over the medium term.

[00:00:17]Joining us now is Benjamin Klein, senior portfolio manager at Baskin Wealth Management. Benjamin, thanks as always for joining us.

[00:00:25]Thanks for having me. Uh short-term, we saw a little bit of a short-term for a couple of days there that oil started dropping. Now it's it's bounced back a little bit to where can you even make a prediction where you think oil is going to go over the short-term right now?

[00:00:38]Uh you know, I think the obvious answer is unless you know what's going to happen with the war in Iran, I don't think I don't think you can. Um obviously that's, you know, to say it's an elephant in the room is probably an an understatement.

[00:00:50]Uh it'll depend on how how this war escalates. If it gets closer to the end of the tunnel than it is now, you know, this could last a day, a month, a year.

[00:00:59]Um the degree to which it continues to escalate or de-escalate is anybody's guess.

[00:01:04]Um obviously if if things do move towards a resolution and and a and a reasonable one that that results in an end to to hostilities, you could see oil prices calm down. Obviously there will be a an adjustment period before that happens um as, you know, supply catches up with demand.

[00:01:20]But the short answer is not really.

[00:01:22]A A And if this does drag on, how how important is it the fact they're countries are drawing down hugely on their reserves?

[00:01:31]Um yeah, I mean clearly there's you know, there's a limit to how much, you know, is out there. I don't think there is really much risk in the short-term of of, you know, countries really depleting or or putting a a significant enough dent into their reserves to have a, you know, a global impact. For Canada, we think this is, you know, probably a positive at least in theory whether or not there's a resolution in the very short-term. We're we're pretty bullish on Canadian energy in the medium term.

[00:01:57]We know the government is working to accelerate investment infrastructure.

[00:02:02]Countries, particularly in North America and Europe, want to diversify energy suppliers. And we think in terms of valuations, valuations are very reasonable even if even if WTI comes down to the 70s or 80s a barrel. And it's definitely it's Canada's now it's on the radar. Is it going to stay on the radar for for other other places Europe for example and as a as a as a source?

[00:02:26]You think so. I mean to some degree it depends on Canada's ability to expand production and expand infrastructure, but certainly if there if there is headway made in that area then then I see no reason why it wouldn't be. And I guess I mean one of the big things Ottawa and Alberta signed that deal, but the stumbling block is what's in between Alberta and the ocean that's BC.

[00:02:48]Do you see that being resolved and we actually see a pipeline?

[00:02:51]I mean hard to say. Obviously there are you know two pretty vocal groups in on on either side. You know it would probably be good for Canadian on a on a baseline oil level. Obviously there are environmental you know and and land concerns.

[00:03:05]Hopefully there's some ability to you know to come to a compromise and and you know appease both sides, but only time will tell. And and going the other way if we want to attract Europe, do we have to go through the states to get our oil there or do we need a pipeline from from going east as well?

[00:03:22]You know very possible. It's really not all that far all things considered you know across the Atlantic. It would be a huge boon if there if the infrastructure could be built if the capital could be allocated. I mean I don't know what the what the what the chances of that happening are and how long it would take, but if it happened I think it would you know be be hugely beneficial for both parties.

[00:03:42]And when you talk about being bullish on the Canadian oil industry medium, what's medium to you and and uh and what do do you what would it take for it to uh make it long-term? Uh bullish long-term? Um well, I would say probably over the next 3 to 5 years, you know, it's uh infrastructure. When the when the will is there, it you know, it can be built relatively quickly. Um you know, who knows what's going to happen in the oil industry over the next 10 years.

[00:04:05]Obviously, with the development of you know, much cheaper solar and you know, administrations in the US being perhaps more or less uh inclined to you know, invest in in clean energy. So, obviously, over the longer term, there are much more you know, many many more uncertain variables. Um but in the you know, let's say the next 5 years, there are a lot of opportunities for for Canada to capitalize on on you know, the the course the horrible uh the horrible war in Iran, but it you know, it could potentially be a benefit to Canadian oil. And you feel it's across the board in the sector?

[00:04:36]We think so. Um you know, Canada obviously has a lot of natural resources that you know, we can we can draw on whether it's natural gas, whether it's oil and and you know, the ability at least in theory uh to get that to get that oil and gas to places that need it.

[00:04:47]So, you know, we think that there's a lot of potential upside. Um still still obviously question marks and and the things have to get done. Uh but if they if they can be done, then it can be it can be a you know, significant positive to the Canadian economy. I just want to come in back back into the short-term.

[00:05:02]It Even with the oil prices where they're at, we're we're still functioning. Can we continue to you or is an impact eventually going to be felt?

[00:05:10]Um you know, we're we're already seeing some impacts. Uh Walmart has said in their commentary that uh inflation has already impacted consumer spending.

[00:05:18]That's you know, I I think it's obvious that more inflation is going to dampen consumer spending and and maybe not quite as obvious to to your everyday consumer how much uh fuel prices impact the cost of particularly things like food. You know, a huge amount. In fact, in a lot of cases, the majority of the cost of food is actually getting the food to the place where it's sold. Um so, you know, it's really just a matter of time, in our opinion, how long it takes for those uh for those impacts to continue to be felt um not just in prices, but in consumer spending as well. And if And if the And if the the war in Iran drags on, we have Everybody waited for oil to hit 150. We heard that talked about.

[00:05:56]Uh, it does that become a possibility if it drags on?

[00:06:00]Sure. Uh, you know, it depends.

[00:06:02]Uh, if it's 2 years from now and we're still we're still dealing with the fallout or still, you know, the war is is is actively going on and if reserves have been drawn down and if, you know, there are other impacts that make it more difficult to move the oil around and and if the demand continues to climb, sure. I I don't know that I'd put my money on it, quite frankly, but there's no reason it couldn't happen.

[00:06:21]All right, let's let's hope not as well.

[00:06:22]And just one last question I want to talk get your thoughts on Nvidia.

[00:06:25]Uh, another I I guess I think it's safe to say stellar performance and yet uh, the markets are indifferent.

[00:06:31]Yeah, um, you know, this is, of course, one of the best companies in the world and we don't own it, but but I you know, absolutely fabulous company and you know, the profits are unfathomable, quite frankly. Um, you know, the they're obviously priced at a level where they need to be pretty much perfect and for the last several years, of course, they have, to their credit.

[00:06:49]Um, you know, the I think the market is worried about a few things. Um, number one is the potential that they they do eventually lose market share uh, to custom chips like Google TPUs, Amazon Trainium, other potential custom chips.

[00:07:01]Um, I I think it's worth noting and this is maybe a little bit surprising about the about how the market is reacting.

[00:07:07]With their new reporting framework, they are showing that they actually are less reliant on hyperscalers because they split out their uh, their revenues into two into two different um, two two different sectors um, and they're have and they've seen significant growth from from AI cloud computing, for example. Um, so, you know, we think that I mean, the earnings have continued to be, you know, phenomenal. Obviously, there are there are risks like with every company. Um, little bit surprised that the you know, the the the stock stock market reaction has been negative, but uh, you know, to some degree, it's uh, you know, in the short term, it's it's very hard to get a sense of what the market wants, particularly when you beat earnings, but the market wanted, you know, an increase to guidance or something like that. You know, if you're if you're a long-term investor and you and you saw those earnings, I think you would be pretty happy. Okay, we'll wrap it up there, Benjamin, but thanks as always for joining us.

[00:07:55]Thank you. Benjamin Klein, senior portfolio manager, Baskin Wealth Management.