Squeeze the industry to please his party’s green base or keep output, revenue and high-paying employment flowing?
Talk at the latest climate-change shindig in Dubai has centred around the future of the oil industry and whether countries should pledge to phase out oil and gas production entirely or simply transform the industry in decades to come. Canada always talks a deep-green game at these affairs but are we really ready to nail shut the oil and gas coffin?
Maybe not. In Dubai Canada announced a cap-and-trade approach to oil and gas emissions but argued it won’t actually stop oil and gas production outright. The provinces, who yet again weren’t consulted, may not agree. Besides, promises are one thing. The record is another.
It also emerged in Dubai that the Emirates, seventh largest oil producer, is expecting to increase its production by a million barrels a day (mbd) by 2030. This is not a new trend. According to the U.S. Energy Information Service, the UAE increased production of oil and hydrocarbon liquids like coal oil by 15.3 per cent between 2015 and 2022, from 3.7 mbd to 4.2, fourth-most of all oil-producing economies. That’s much faster than world output, which was up only 3.6 per cent since 2015, reaching 100.1 mbd last year.
The irony — maybe even the hypocrisy — is that three countries in the Americas have increased their petroleum output even more than this Middle Eastern oil sheikhdom has: the U.S., Brazil and, yes, us: Canada.
The Biden administration, which is promising 2030 emissions will be half 2005 levels, has so far failed to stymie oil and gas development. U.S. petroleum and liquids production has soared by 33.9 per cent since 2015, reaching 20.3 mbd in 2022. Two-fifths of the increase has been on Biden’s watch. The U.S., not Saudi Arabia, is now the world’s leading oil producer, accounting for fully 20 per cent of global supply.
The Trudeau government has pledged that 2030 oil and gas emissions will be 42 per cent lower than in 2005. This has led to tensions with the oil- and gas-producing provinces, which are resisting emissions caps for oil, gas and electricity. Ottawa’s opposition to liquefied natural gas sales even as the U.S. and Qatar are making great inroads in the world market has had industry leaders scratching their heads. Even so, since the Liberals came to power in 2015, Canada’s oil and gas production has grown second fastest globally, at 26.7 per cent, to reach 5.6 mbd last year. Much of this growth is due to big investments in the oil sands before 2015 but the production increase has been accommodated by pipeline expansion, with the federally-owned TMX soon to come on stream.
Neither Biden nor Trudeau is attending COP28 but Brazil’s president, Lula de Silva, stormed in at the head of a delegation of 2000 to repeat a pledge to cut 2030 emissions to less than half 2005 levels. Much of reduction results from reforestation, however, not phasing out oil and gas. And, to the surprise of attendees, Lula announced that Brazil will align itself more closely with OPEC. No shock there. Since 2015, Brazil’s oil and gas production has risen by 20 per cent, making it the 8th largest producer in the world at 3.8 mbd last year. It now evidently sees itself as a player.
Besides the U.S. Canada, Brazil and UAE, only Iraq (at 10.4 per cent) and Kazakhstan (at 4.5 per cent) have seen their oil production grow faster than the world average since 2015. The rest have had little growth, with seven countries registering declines, including 22.4 per cent in Mexico and 36.7 per cent in Nigeria, the biggest drop anywhere.
The standstill or even loss in oil and gas production in many oil-producing countries since 2015 is due to several factors. Oil prices dropped by three-fifths after 2014 and the pandemic caused another crash. More recently, Saudi Arabia and Russia have persuaded OPEC+ to constrain production and push prices to over US$80 per barrel — mainly in order to replenish their treasuries. In some places, including Ghana, the U.K. and Norway, old fields are depleting. Elsewhere, but especially in Africa and Mexico, crime and political instability continue to discourage development. Finally, in the face of lagging demand, investors have encouraged companies to distribute profits rather than invest in greenfield oil and gas projects.
But top producers like the U.S. and Canada are not holding back and governments aren’t stopping them. Phase-out is all short-term cost in pursuit of climate gains that won’t be realized for decades, if at all. Nor are politicians willing to eliminate the tax revenues and high-paying jobs the industry generates. With energy security crucial in an increasingly dangerous world, oil-consuming countries are finding that intermittent renewable energy and other high-cost energy sources are no substitute for fossil fuels.
As the federal Liberals sink in the polls, they face a many-ways existential choice. Do they pursue their climate promises and phase out oil and gas? Or do they secure the benefits of oil and gas production for years to come? Or, a third option: do they say one thing but quietly do the other? Is it all, as Shakespeare would say, “much ado about nothing”?
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“While there has always been a clear majority of Canadians supporting the development of new pipelines, it seems that the trade dispute has helped firm up this support,” says Gabriel Giguère, senior policy analyst at the MEI. “From coast to coast, Canadians appreciate the importance of the energy industry to our prosperity.”
Three-quarters of Canadians support constructing new pipelines to ports in Eastern Canada or British Columbia in order to diversify our export markets for oil and gas.
This proportion is 14 percentage points higher than it was last year, with the “strongly agree” category accounting for almost all of the increase.
For its part, Marinvest Energy’s natural gas pipeline and liquefaction plant project, in Quebec’s North Shore region, is supported by 67 per cent of Quebecers polled, who see it as a way to reduce European dependence on Russian natural gas.
Moreover, 54 per cent of Quebecers now say they support the development of the province’s own oil resources. This represents a six-point increase over last year.
“This year again, we see that this preconceived notion according to which Quebecers oppose energy development is false,” says Mr. Giguère. “Quebecers’ increased support for pipeline projects should signal to politicians that there is social acceptability, whatever certain lobby groups might think.”
It is also the case that seven in ten Canadians (71 per cent) think the approval process for major projects, including environmental assessments, is too long and should be reformed. In Quebec, 63 per cent are of this opinion.
The federal Bill C-5 and Quebec Bill 5 seem to respond to these concerns by trying to accelerate the approval of certain large projects selected by governments.
In July, the MEI recommended a revision of the assessment process in order to make it swift by default instead of creating a way to bypass it as Bill C-5 and Bill 5 do.
“Canadians understand that the burdensome assessment process undermines our prosperity and the creation of good, well-paid jobs,” says Mr. Giguère. “While the recent bills to accelerate projects of national interest are a step in the right direction, it would be better simply to reform the assessment process so that it works, rather than creating a workaround.”
A sample of 1,159 Canadians aged 18 and older were surveyed between November 27 and December 2, 2025. The results are accurate to within ± 3.5 percentage points, 19 times out of 20.
Oil markets are shrugging off war and sanctions, a sign that oversupply now matters more than disruption
Oil producers hoping geopolitics would lift prices are running into a harsh reality. Markets are brushing off wars and sanctions as traders focus instead on expectations of a deep and persistent oil glut.
That shift was evident last week. Despite several geopolitical developments that would once have pushed prices higher, including the U.S. seizure of a Venezuelan crude tanker and fresh Ukrainian strikes on Russian energy infrastructure, oil markets barely reacted, with prices ending the week lower.
Brent crude settled Friday at US$61.12 a barrel and U.S. West Texas Intermediate at US$57.44, capping a weekly drop of more than four per cent.
Instead of responding to disruption headlines, markets were reacting to a different risk. Bearish sentiment, rather than geopolitics, continued to dominate as expectations of a “2026 glut” took centre stage.
At the heart of that outlook is a growing supply overhang. The oil market is grappling with whether sanctioned Russian and Iranian cargoes should still be counted as supply. That uncertainty helps explain why prices have been slow to react to a glut that is already forming on the water, said Carol Ryan, writing for The Wall Street Journal.
The scale of that buildup is significant. There are 1.4 billion barrels of oil “on the water,” 24 per cent higher than the average for this time of year between 2016 and 2024, according to oil analytics firm Vortexa. These figures capture shipments still in transit or cargoes that have yet to find a buyer, a clear sign that supply is running ahead of immediate demand.
Official forecasts have reinforced that view. Last week, the International Energy Agency trimmed its projected 2026 surplus to 3.84 million barrels per day, down from 4.09 million barrels per day projected previously. Even so, the IEA still sees a large oversupply relative to global demand.
Demand growth offers little relief. The IEA expects growth of 830 kb/d (thousand barrels per day) in 2025 and 860 kb/d in 2026, with petrochemical feedstocks accounting for a larger share of incremental demand. That pace remains modest against the volume of supply coming to market.
OPEC, however, has offered a different assessment. In its latest report, the group pointed to a near balance, forecasting demand for OPEC+ crude averaging about 43 million barrels per day in 2026, roughly in line with what it produced in November.
Reflecting that confidence. OPEC+ kept policy steady late in November, pausing planned output hikes for the first quarter of 2026 while more than three million barrels per day of cuts remain in place. Those measures are supportive in theory, but markets have shown little sign of being persuaded.
Recent geopolitical events underline that scepticism. The ongoing Russia-Ukraine war and Ukrainian strikes on Russian energy infrastructure, including reported hits on facilities such as the Slavneft-YANOS refinery in Yaroslavl, again failed to lift prices. Russia-Ukraine headlines pulled prices down more than strikes lifted them, according to media reports, suggesting traders were more attuned to “peace deal” risk than to supply disruption.
Washington’s move against Venezuelan crude shipments offered another test. The U.S. seizure of a Venezuelan tanker, the first formal seizure under the 2019 sanctions framework, had a muted price impact, writes Marcin Frackiewicz of Oilprice.com.
Venezuela’s exports fell sharply in the days that followed, but markets remained largely unmoved. One explanation is that Venezuela’s output is no longer large enough to tighten global balances the way it once did, and that abundant global supply has reduced the geopolitical premium.
Taken together, the signal is hard to miss. Oil producers, including in Canada, face a reality check in a market that no longer rewards headlines, only discipline and demand.
Toronto-based Rashid Husain Syed is a highly regarded analyst specializing in energy and politics, particularly in the Middle East. In addition to his contributions to local and international newspapers, Rashid frequently lends his expertise as a speaker at global conferences. Organizations such as the Department of Energy in Washington and the International Energy Agency in Paris have sought his insights on global energy matters.
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