Morningstar DBRS' Takeaways From 2026 Credit Insights Calgary: The Continued Closure of the Strait of Hormuz Is an Oil and Gas Opportunity for North America

Why It Matters

The disruption reshapes global energy flows, positioning the United States and Canada as preferred, politically stable LNG suppliers and tightening oil markets, which could lift prices and drive investment in North American export infrastructure.

Key Takeaways

• Strait of Hormuz closure cuts tanker traffic ~80%, limiting Gulf oil flow
• Global crude oil deficit 8‑10 million barrels per day, 9% of demand
• U.S. and Canadian gas storage sits ~5‑7% above five‑year averages
• North American LNG exports near capacity, cannot meet rising European/Asian demand
• Canada’s West Coast LNG projects secure early sales to Germany, boosting competitiveness

Pulse Analysis

The protracted shutdown of the Strait of Hormuz, once responsible for 20% of global crude and seaborne gas shipments, has produced an unprecedented supply shock. With Suez Canal transits down 85% and tanker crossings through the Strait down about 80%, the Gulf’s ability to meet worldwide demand is severely constrained. The International Energy Agency estimates a crude deficit of eight to ten million barrels per day—roughly nine percent of global consumption—pressuring inventories and keeping oil prices elevated.

In North America, abundant natural‑gas production and storage buffers have softened the immediate impact of the LNG shortfall. U.S. gas inventories sit roughly seven percent above the five‑year average, while Canada’s are about four percent higher, providing a cushion against seasonal demand spikes. However, LNG export facilities in both countries are operating near full capacity, limiting their ability to respond to the 50% price surge seen in European and Asian benchmarks since the conflict began. This capacity constraint, combined with the geopolitical risk to Middle‑East supplies, is prompting buyers to prioritize politically stable sources.

Canada’s emerging West Coast LNG projects and the United States’ expanding liquefaction capacity are poised to benefit from this shift. Canadian terminals offer shorter voyages to Asian markets and avoid chokepoints like the Strait and Panama Canal, while colder climates reduce operating costs. Recent sales agreements, such as a deal to supply Germany from British Columbia, signal growing confidence in Canadian projects. Meanwhile, U.S. developers are accelerating new liquefaction and pipeline projects, supported by federal incentives. Together, these trends suggest a lasting realignment toward North America as a cornerstone of the global LNG supply chain.