Rising crude oil and gas prices are intensifying inflationary pressures across Canada, fueled by tight global oil supplies and escalating geopolitical tensions in the Middle East. Canada’s annual inflation rate increased to 3.1% in September 2026, from 3.0% in August. While rising energy costs are squeezing consumers and increasing operating expenses for businesses, they are benefiting energy producers, which have emerged as the primary beneficiaries of the higher price environment.
Several Canadian energy stocks have recorded substantial gains as elevated oil and natural gas prices have strengthened the sector’s investment outlook. If supply constraints and geopolitical uncertainties continue to support commodity prices, these stocks could retain their upward momentum.
Against this backdrop, two TSX energy stocks have emerged as winners.
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Energy stock #1: Cenovus Energy
Cenovus Energy (TSX: CVE) has benefited significantly from rising oil and gas prices, with its shares more than doubling year-to-date. The integrated energy producer operates extensive oil and natural gas assets across Canada and the Asia-Pacific region, complemented by significant refining and upgrading operations.
Its low-cost, long-life reserves and integrated business model provide resilience against commodity price volatility, supporting stable cash flow and profitability across market cycles.
Rising commodity prices have improved financial performance, allowing Cenovus to reduce debt and increase shareholder distributions. Notably, it has increased its base dividend at a double-digit annual rate for six consecutive years. Management anticipates annual dividend growth above 10%.
Cenovus’s focus on production expansion, high-return investments, and cost control augurs well for growth. The acquisition of MEG Energy and the Christina Lake North assets has strengthened its low-cost oil sands portfolio and created opportunities to expand output.
Operational improvements in refining and upgrading are expected to increase efficiency and asset profitability. Further debt reduction should strengthen the balance sheet and enhance financial flexibility across commodity cycles.
Overall, Cenovus’s integrated operations, competitive cost structure, and disciplined capital allocation support its long-term investment case. Moreover, higher commodity prices and production growth position it well to deliver solid growth in the quarters ahead.
Energy stock #2: Canadian Natural Resources
Canadian Natural Resources (TSX: CNQ) has benefited from favourable oil and natural gas prices, with its share price up about 71% year-to-date in 2026. Strong production and a solid pricing environment drove record second-quarter results. Adjusted net earnings reached about $4.6 billion, or $2.20 per share, while adjusted funds flow climbed to a record $6.9 billion, or $3.30 per share.
Robust cash generation enabled CNQ to distribute $2.4 billion to shareholders through $1.3 billion in dividends and $1.1 billion in share repurchases. It also allocated $1.6 billion to reduce net debt, strengthening its balance sheet and improving financial flexibility.
Canadian Natural raised its 2026 production guidance for the second time this year. Higher output, favourable realized prices, and relatively low operating costs could sustain strong cash flow generation, creating capacity for further dividend increases, debt reduction, and capital appreciation.
Dividend growth remains a key component of CNQ’s investment appeal. The company has increased its annual dividend for 26 consecutive years, making it a reliable income stock.
Looking ahead, CNQ’s long-life, low-decline asset base, proven reserves, higher pricing, and extensive undeveloped resource inventory provide a solid foundation for growth.
