Canadian oil stocks are falling due to massive news, which, if it comes true, could mark the end of a growth cycle. The U.S. president Donald Trump will meet Russian president Vladimir Putin and Ukrainian president Volodymyr Zelenskyy to negotiate the Russia-Ukraine peace talks. If the talks go as expected, some U.S. sanctions on Russian oil could be lifted. If bans are lifted, India and China can resume oil buying from Russia at a lower cost. Already, the market is witnessing an oil supply glut that has pulled down West Texas Intermediate (WTI) crude price from US$60/barrel to US$56.
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Canadian oil stocks in correction mode
Canada’s largest oil sands reserve, Canadian Natural Resources, has a breakeven cost of mid-US$40s/barrel. This is when CNQ has a cost advantage over others. In most cases, Canadian oil companies can remain profitable and sustain dividends at US$50/barrel. Hence, it comes as no surprise that CNQ’s share price dipped 10% in December. Share price of other oil and gas producers, such as Altagas, Suncor Energy, Tourmaline Oil, and pipeline stocks, such as Enbridge and Pembina Pipeline, fell by 6-8% since December 3.
A Canadian contrarian energy stock to buy now
However, one pipeline stock beat the market, and that was TC Energy (TSX: TRP). TC Energy has spun off its oil pipeline business. This has freed the company from the problematic Keystone pipeline, which has been dragging its returns down with several oil spills. The spin-off has removed TC Energy’s exposure to oil prices and increased its focus on natural gas pipelines.
In the first nine months of 2025, TC Energy placed around $8 billion of assets into service, with projects tracking about 15% under budget. It has sanctioned approximately $5.1 billion of new projects at an average build-to-sell multiple of about six.
Despite TC Energy stock trading closer to its all-time high, it is valued lower than Enbridge. TC Energy trades at 20.8 times its earnings per share (EPS) compared to Enbridge’s 25 times.
How to navigate the oil price volatility in 2026
Oil prices will fall if the peace talks progress, and rise if things don’t go as planned. This uncertainty will attract more countries to seek safety in gold, driving up gold prices and gold stocks. Gold and oil are the most widely traded commodities, and they have moved in the same direction. However, quantitative easing in the 2008 Financial Crisis has turned their correlation negative.
Take 2025, for instance, the gold price surged 58% while the WTI crude price fell 18%. This contrarian move occurred as the gold price surged due to tariff-induced inflation, while the WTI crude price fell to absorb the 10% tariff on Canadian oil exports. The gold price also jumped because central banks worldwide have been accumulating gold reserves to reduce their dependence on the U.S. dollar.
Gold continues to be a safe haven and the preferred investment to hedge against inflation, economic uncertainty, and global trade shifts. Lundin Gold (TSX: LUG) stock has jumped 259% so far in 2025. It has one of the lowest all-in sustaining costs (AISCs) of $957 per ounce sold, and gold is trading near US$4,300. Lundin expects the AISCs to increase to $1,060-$1,170 in 2026. It is lower than Kinross Gold’s AISCs of $1,490 per gold ounce and Barrick Gold’s $1,660. If you are looking to buy a gold stock, consider Lundin Gold for maximum returns.
