Trade tensions have existed before. But this time, it has hit home with the United States-Canada tariff wars and growing concerns around the upcoming renewal of the United States-Mexico-Canada Agreement (USMCA) on July 1. For investors, understanding how trade tensions ripple through commodities, energy, and gold markets is critical.
Source: Getty Images
Understanding trade tensions
When trade tensions were limited to tariffs, they affected energy stocks. The U.S. wanted to reduce its trade deficit. Hence, it imposed tariffs to reduce imports and force trade partners to buy more American goods at higher prices. Oil, the most widely traded commodity, became a focal point. Now, the U.S. is using sanctions and military power to secure global oil reserves and sell oil in U.S. dollars.
This episode mirrors the 1970s energy crisis, when Gulf tensions increased oil prices to the level that it altered oil consumption. Industrial activity slowed; countries shifted from oil to other sources, such as nuclear, coal, and natural gas, to produce electricity; fuel-efficient cars became popular; and ethanol-blended gasoline reduced oil demand. When oil supply increased in the 1980s, oversupply caused prices to crash to $7 per barrel. The gold price rose alongside the oil price as countries needed gold reserves to buy oil. The U.S. used this crisis to encourage Gulf countries to sell oil in U.S. dollars.
If you can draw parallels with the 1970s crisis, you know that the U.S. will do anything to control oil prices so that there is no permanent shift in oil demand.
Canadian companies finding opportunity amid trade tensions
While global oil exporters are embroiled in conflict, Canada is seizing opportunities created by trade tensions. It is opening up its oil production to non-U.S. partners. Until 2024, almost all of Canada’s oil and gas was exported to the United States. Whatever little was exported to other countries happened via US ports. In June 2025, Canada shipped its first liquified natural gas (LNG) to Asia through the LNG Canada terminal. Now, it is expanding this terminal to expand its export market. The Canadian prime minister has also agreed to supply energy to India and China.
TC Energy’s LNG export opportunity
TC Energy (TSX:TRP) has gone oil-free and is now building natural gas pipelines at an accelerated pace to tap the LNG export opportunity. Its biggest growth driver could be the Natural Gas Transmission Line pipeline. Natural-gas-fired power plants powering artificial intelligence (AI) data centres are also driving demand, pushing TC Energy’s share price to an all-time high.
Freehold Royalties rising oil prices opportunity
Freehold Royalties (TSX:FRU) is betting on oil. It acquired oil reserves in the Permian Basin in 2020, when the oil market was bearish. Now, it has leased the land to ConocoPhillips and other U.S. oil companies, who are doing all the work of extraction, refining, and closing the wells. They pay a royalty to Freehold, which is based on the oil price and volumes.
So, when oil prices rise, Freehold gets surplus cash. It has maintained a 1.1 times net debt to earnings before interest, taxes, depreciation, and amortization (EBITDA) and uses the surplus to reduce debt and pay dividends. It can sustain profits and a fixed dividend at US$50 WTI.
Barrick Gold’s hedging opportunity
Barrick Mining (TSX:ABX) is also benefiting from the rising trade tensions as gold prices are escalating. Its all-in sustaining cost (AISC) is $1,637 per ounce, and gold is currently trading above $4,500 per ounce. Barrick may not have one of the lowest AISC, but it also mines copper. Copper prices have been rising amidst increasing demand for cooling needs by AI data centres.
Barrick Mining’s stock price surged 186% between February 2025 and 2026 when the oil price corrected. However, it fell 26% in March when oil prices surged.
Investor takeaway
The current global energy crisis, fueled by the war in Iran and escalating trade tensions, is unlikely to end soon. For investors, this means opportunities in Canadian energy and mining companies. Holding oil stocks, buying gold stocks, and watching LNG exporters could be smart strategies to navigate the volatility created by trade tensions.
