Canadian investors face a mix of geopolitical turbulence, transformative infrastructure projects, and shifting global energy dynamics as Canada’s energy sector stocks brace for a pivotal year in 2025. From President Trump’s tariffs to the long-awaited Trans Mountain pipeline expansion, here’s what you need to know to navigate this high-stakes landscape—and which stocks could thrive.
Trump’s tariffs: A double-edged sword for Canadian energy stocks
The U.S. imposed, then delayed, a 10% tariff on Canadian energy imports in February 2025, targeting crude oil and natural gas. While this threatens Canada’s oil-dependent economy (about 80% of energy exports historically went to the U.S.), the impact varies across companies.
Integrated oil producers like Imperial Oil are largely insulated, with about 81% of revenue generated from domestic refining and retail operations. Only a small fraction of its sales face direct exposure to U.S. tariffs. Similarly, Suncor Energy (TSX:SU), with its extensive Petro-Canada retail network, refines over half of its production domestically, reducing its vulnerability to trade tensions.
However, some energy plays like Cenovus Energy stock face higher risks, as roughly 50% of revenue comes from U.S. refineries. This disparity has accelerated efforts to diversify exports beyond the U.S., a strategy made possible by the recent completion of the Trans Mountain Pipeline Expansion (TMX). This project, now operational, increases Canada’s oil export capacity to 890,000 barrels per day, opening critical access to Asian and European markets.
Oil prices: Stability amidst volatility
Economists expect global oil prices to hover near US$70 per barrel in 2025, though risks of oversupply loom. The usual key factors influencing prices include OPEC+ production cuts aimed at stabilizing markets, growing energy demand from India and China, and the potential for U.S. shale producers to flood markets if drilling accelerates.
Amid this uncertainty, Canadian producers like Canadian Natural Resources (TSX:CNQ) are focusing on volume over price. The company plans a 12% production increase in 2025, targeting up to 1.55 million barrels of oil equivalent per day. With vast reserves, low-decline assets, and industry-leading low breakeven costs, CNQ stock is well positioned to profit even in a lower-price environment.
TSX energy stocks to watch in 2025
Suncor stock
Suncor stock stands out for its vertical integration, spanning oil sands extraction to refineries within Canada and its expansive retail network of 1,585 Petro-Canada gas stations. This structure helps buffer against oil price volatility. The company’s upstream production reached a record 827,600 barrels per day in 2024, and management guides for production to range between 810,000-840,000 barrels per day in 2025 — a new record is possible.
The energy sector giant recently raised dividends by 5% to offer a robust dividend yield above 4% to new investors for 2025, with a noble intent to return 100% of excess cash flow to investors through share repurchases and dividends this year. Future total returns for SU stock investors could be handsome.
Parex Resources
Parex Resources (TSX:PXT) stock is coming out of production exploration hiccups of 2024, and its oil production from Colombia is sold to international markets at London’s Brent Crude Index prices, potentially by-passing Trump tariffs. What’s more? Management seems keen to maintain the still promising energy stock’s quarterly dividends intact in 2025. The PXT quarterly dividend yields a juicy 11% annually!
Industry moves: Pipelines, LNG, and mergers
The 2024 launch of the Trans Mountain Pipeline marks a turning point for Canadian energy independence. By redirecting 890,000 barrels per day to non-US export markets, Canada reduces reliance on U.S. buyers, and Canadian crude oil is earning marginally higher prices in these new markets, with China a significantly big customer.
Meanwhile, the $40 billion LNG Canada project begins operations this year, positioning Canada as a key global natural gas exporter, diversifying fortunes from a tariff-wielding U.S. market.
Mergers and acquisitions may also heat up if smaller producers struggle with new tariff pressures.
Investor takeaway
2025 will most likely test Canada’s energy sector, but opportunities abound. Investors should prioritize companies with diversified revenue streams, such as Suncor stock, and those positioned to capitalize on export growth, like Canadian Natural Resources.
While Trump’s potential tariffs and green regulations pose risks, Canada’s vast resources and infrastructure upgrades—including the Trans Mountain Pipeline and LNG Canada—create a compelling long-term investment thesis. Stay alert to geopolitical shifts, prioritize companies with strong balance sheets, and keep an eye on mergers as the industry consolidates.
