U.S. Investors Boost Canadian Energy Stocks Amid Low Oil Prices

Despite a decline in global oil prices, Canadian energy companies are witnessing a surge in interest from U.S. investors. According to data from McCrea, U.S. funds now hold approximately 59% of Canadian oil and gas companies, up from 56% at the end of 2024. In contrast, the share of investments from Canadian sources has dropped to 34% from 37%. This trend highlights a significant shift in the investment landscape of Canada’s energy sector.

Reasons Behind the Shift

This influx of U.S. investment is attributed to several factors. The current Canadian leadership under Prime Minister Mark Carney has adopted a more favorable stance towards fossil fuel investments. Carney has pledged to position Canada as an energy superpower, a marked shift from the policies of former Prime Minister Justin Trudeau, who prioritized clean energy initiatives. Trudeau’s administration focused on funding electric vehicle infrastructure, establishing a national carbon tax, and imposing a five-year moratorium on oil and gas drilling in the Arctic.

Moreover, the completion of the Trans Mountain Pipeline expansion has significantly enhanced confidence in Canada’s oil and gas sector. With a capacity of 890,000 barrels of oil per day, the expanded pipeline nearly triples the previous capacity. Since beginning commercial operations in May 2024, the Trans Mountain Pipeline has been operating at approximately 82% of its maximum capacity, transporting crude oil from Edmonton, Alberta, to the Westridge Marine Terminal in Burnaby, British Columbia.

Cost Competitiveness and Market Performance

Another critical factor is the lower breakeven point for Canada’s oil sands, which allows production to remain profitable even when oil prices fall. The average breakeven price for Canadian oil sands ranges from $40 to $57 per barrel, with some large producers achieving even lower costs. Recent technological advancements and debt reduction have made Canadian oil sands production increasingly competitive globally.

The performance of the Canadian energy sector reflects these dynamics, with the TSX Energy Index rising by 19.5% year-to-date, in stark contrast to a 6.0% gain by the S&P 500 Energy Index. Several Canadian energy stocks have outperformed the market, showcasing the sector’s resilience.

Among the notable performers is Falcon Oil & Gas Ltd. (OTCPK: FOLGF), which has achieved a market capitalization of $150.1 million and year-to-date returns of 147.2%. The company focuses on acquiring and developing oil and gas assets across regions like Australia, South Africa, and Hungary. Its success can be attributed to the progress on the Shenandoah South Pilot Project in Australia, expected to commence gas sales by mid-2026.

Tamarack Valley Energy (OTCPK: TNEYF) has also seen impressive growth, with a market cap of $2.7 billion and year-to-date returns of 66.0%. The company emphasizes responsible energy development with a focus on high-quality assets in Alberta. Its strong operational results and strategic financial management have contributed to its stock performance.

Imperial Oil Ltd. (NYSE: IMO), with a market cap of $49.0 billion and year-to-date returns of 61.9%, is another standout. The company has achieved record upstream production, with the highest quarterly crude production in three decades, averaging 462,000 oil-equivalent barrels per day during the third quarter of 2025.

Other notable companies include NuVista Energy Corp. (OTCPK: NUVSF) and Peyto Exploration & Development Corp. (OTCPK: PEYUF), which have demonstrated strong operational execution and strategic financial management, contributing to their growing market presence.

As Canadian energy companies continue to attract U.S. investments, the sector appears well-positioned to navigate the challenges posed by fluctuating oil prices, bolstered by supportive government policies and competitive production costs.

For more detailed insights, readers can refer to analyses from Oilprice.com.