OPEC+ sticks to modest hike while fires force shutdowns and Carney pushes pipeline
Wildfires in Alberta have disrupted more than 344,000 barrels per day of oil sands output—roughly 7 percent of Canada’s crude oil production—according to Reuters.
The fires have prompted evacuations and shutdowns across several sites, severely impacting the country’s energy sector.
As per Reuters, Canadian Natural Resources evacuated workers and shut approximately 36,500 bpd at its Jackfish 1 site, while Cenovus Energy halted around 238,000 bpd of output at Christina Lake.
MEG Energy said fires caused a power outage, delaying the startup of its 70,000 bpd Phase 2B operations, though production continued.
Aspenleaf Energy also shut in about 4,000 bpd of conventional production near Swan Hills.
Alberta Premier Danielle Smith said Monday that 400,000 hectares have burned in the province, forcing the evacuation of nearly 5,000 people.
She confirmed the restart of Alberta’s emergency management cabinet committee, citing worsening conditions.
The Canadian Interagency Forest Fire Centre reported that 1.4 million hectares have burned nationwide as of June 1.
According to the US Environmental Protection Agency, smoke from these fires has also degraded air quality in parts of Minnesota and North Dakota.
The production cut came amid restrained output plans from OPEC+. The group announced a July hike of 411,000 bpd—its third consecutive monthly increase—despite earlier speculation about a larger boost.
According to Reuters, oil traders had already priced in the 411,000 bpd figure.
Brent crude futures settled at $64.63, up $1.85 or 2.95 percent, and US West Texas Intermediate gained $1.73, or 2.85 percent, to $62.52 per barrel.
Phil Flynn of Price Futures Group noted that investors had anticipated a larger hike, saying, “I think they were caught the wrong way.”
Goldman Sachs and Morgan Stanley both project that the group will continue adding approximately 410,000 to 411,000 bpd each month through October.
Goldman Sachs analysts cited “relatively tight spot oil fundamentals” and seasonal demand, while Morgan Stanley added, “there is little sign that the pace of quota increases is slowing.”
Other price pressures included a weakened US dollar, which, as per Reuters, fell on concerns over tariff threats by US President Donald Trump.
Jorge Leon of Rystad Energy cited rising geopolitical risk due to Ukrainian drone strikes on Russia.
Meanwhile, Reuters noted that ongoing US-Iran nuclear negotiations added further uncertainty, as an Iranian diplomat suggested Iran might reject a US proposal.
In parallel to these supply disruptions, Prime Minister Mark Carney met with over two dozen energy executives in Calgary on Sunday, including leaders from Cenovus Energy, Imperial Oil, Pathways Alliance, and Tourmaline Oil.
According to CBC, the roundtable aimed to discuss partnerships and federal energy policy.
Carney told attendees, “Partnership is a theme for our discussion this morning… We will do everything we can at the federal government level to support those partnerships.”
As reported by the Financial Times, Carney offered conditional support for new pipelines and a multibillion-dollar carbon capture project in Alberta.
He described this as a potential “grand bargain” that would enable increased exports of “decarbonised Canadian oil and gas.”
Speaking in Saskatoon, he said, “We can give ourselves far more than any foreign government can ever take away.”
Industry reaction was mixed.
Lisa Baiton, CEO of the Canadian Association of Petroleum Producers, said they “recognised and appreciate the significant change in tone from prime minister Carney’s new federal government.”
Adam Waterous of Strathcona Resources told Carney “the federal government has got it half right,” welcoming carbon capture incentives while criticising pipeline restrictions.
TC Energy CEO François Poirier described Carney’s approach as “quite pragmatic.”
Carney’s visit follows a joint letter from 38 energy CEOs calling for the repeal of the federal emissions cap, carbon pricing changes, and overhauls to both the Impact Assessment Act and the Oil Tanker Moratorium Act.
The federal government’s proposed regulations would require oil and gas producers to cut emissions to 35 percent below 2019 levels by 2030–2032.
Smith, on her radio show, said Carney’s throne speech did not mention pipelines, but added, “conventional energy means oil and gas, and the only way to get it to market efficiently is through pipelines.”
She expressed optimism for a one-on-one meeting with Carney at the First Ministers conference in Saskatoon.
Carney also acknowledged wildfire response efforts, thanking the Department of National Defence, provincial governments, and volunteers.
He stated, “It’s not over until it’s over… we’ll stay committed to doing everything that we can with partners.”
