Last week, one of the defining market trends was energy independence. Specifically, both the U.S. and Europe seem to be on a mission to become less dependent on Russian oil and gas exports amid the conflict with Ukraine. It hasn’t been easy for the U.S. of course, but now Canada may be offering a solution. Today, Canadian oil stocks are up after one of the country’s energy officials proposed an idea that could help bolster both economies.
Sonya Savage is the Minister of Energy for Canada’s Alberta province. This weekend, the official tweeted that she believes Alberta can provide exactly what the U.S. needs. This news has sent Canadian oil stocks shooting up as the anticipation mounts.
Just how well are Canada’s oil producers doing following this news? The gains are varied, but many of the sector’s biggest names are in the green. Imperial Oil (NYSEAMERICAN:IMO) is relatively flat for the day while Canadian Natural Resources (NYSE: CNQ) has risen 1.1%. Cenovus Energy (NYSE:CVE) is up 1.6% as well. Finally, the winner of the day looks like Suncor Energy (NYSE:SU). The stock is up more than 4.5%.
What’s Going on with Canadian Oil Stocks?
For the United States, this proposal seems like an excellent opportunity. Since the conflict in Ukraine began, it has become increasingly clear that the U.S. and other economic superpowers are feeling the pressure to reduce their dependency on Russia’s oil industry.
Of course, both the U.S. and the U.K. have been hesitant to impose sanctions on Russian oil producers so far. This isn’t without reason. It would mean significant economic consequences for both nations. However, moving forward, the U.S. will likely be tempted to explore the idea proposed by Savage.
Savage originally proposed that the U.S. turn to Alberta for oil in a tweet. The official was responding to a call to action from Tesla (NASDAQ:TSLA) CEO Elon Musk.
Agreed. And it should come from Alberta, home of the 3rd largest oil reserves.
Alberta is the answer to US Energy security. Real emissions reductions, reliable, right next door. https://t.co/Vr1SZZXlum
— Sonya Savage (@sonyasavage) March 5, 2022
Savage’s short description sums up the benefits for the U.S. quite well: “Real emissions reductions, reliable, right next door.” This reads like a sales pitch — and it may just be an effective one.
What It Means
There’s no question that an increased relationship between the U.S. and Canadian oil companies would be an outstanding catalyst for Canadian oil stocks. If President Joe Biden were to sanction Russia’s oil producers, it could pose even more severe effects on the economy. However, partnering with Canadian oil could certainly help alleviate the pain. Incentive has never been higher for the U.S. to strike a deal.
As such, all investors should be watching Canadian oil stocks closely moving forward.
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.