With war in the Middle East keeping the critical Strait of Hormuz fuel route closed, the international community is reaching into its oil reserves to fill the supply gap.
On Wednesday, the International Energy Agency (IEA) agreed to release 400 million barrels from its emergency reserves — its largest-ever release — in order to help ease a disruption of “unprecedented” scale, the IEA said.
That’s drawing scrutiny of Canada’s oil reserves — or, rather, its lack of them, as Canada is the only nation in the G7 that doesn’t maintain a strategic reserve.
While Natural Resources Minister Tim Hodgson said on Wednesday that Canada would “do its part” to help contribute to the global oil supply, Conservative Party Leader Pierre Poilievre criticized the Liberal government for not having any reserves.
“Our stockpiles are at zero,” Poilievre said during a heated debate with the prime minister during question period on Wednesday.
But why doesn’t Canada have a strategic reserve, and what can the country do to help boost the world’s supply? Here’s what you need to know.
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Canada is one of the 32 member countries of the IEA. The international body and its reserves were created in 1974 to co-ordinate an international response to an energy crisis at the time, started by the Arab oil embargo.
Member countries currently hold more than 1.2 billion barrels of public emergency oil stocks, with a further 600 million barrels of industry stocks held under government obligation.
The organization stipulates that members set enough oil aside to cover 90 days’ worth of net imports — but Canada doesn’t have to have reserves, because it’s a net exporter.
The U.S. is also a net exporter but keeps a strategic reserve anyway. The U.S. plans to tap some 174 million barrels of oil from its reserves starting next week.
While most of Canada’s oil goes to the U.S., some from the Trans Mountain pipeline also supplies Asian markets, which face some of the greatest need as a result of the Strait of Hormuz shutdown.
Rory Johnston, a Canadian industry analyst and founder of Commodity Context, says that while dipping into the global reserves will help with supply a little, it’s not enough to fill the gap left by the stoppage in the Strait, where some 20 million barrels would pass through per day before the war.
Johnston says the current situation shows how it might be time to rethink that rule about exporters not having a strategic reserve.
“If we had a [strategic petroleum reserve], we could have surge supply,” Johnston said. “Because in this moment, Canada can’t increase production in order to offset this disruption.”
Richard Masson, former CEO of the Alberta Petroleum Marketing Commission, agrees that there’s little room to expand production in the short term on top of the millions of barrels already sent abroad each day.
“We already run at full capacity, and there’s no slack in the system,” Masson told CBC Radio’s Calgary Eyeopener.
Between June 2024 and June 2025, the Trans Mountain pipeline was operating at 82 per cent capacity on average. And while the plan is to increase capacity, that can’t happen overnight.
Masson explains that projects to add more pumping stations and drag-reducing agents to the pipeline that would help it flow faster are still years out, and wouldn’t come online until some time between 2027 and 2030.
While the company anticipates it could add hundreds of barrels of output per day through those proposed projects, Masson says it’s “a drop in the bucket compared to the overall global need.”
Additional projects proposed in Quebec’s Baie-Comeau and approved in Newfoundland’s Bay du Nord could eventually add to Canada’s output, too, but would also take years to complete.
Minister Hodgson told reporters on Wednesday that Canada is in discussions with its energy industry to see how it could support the IEA action. While he acknowledged Canada’s oil industry is already functioning at capacity, he said options could include delaying downtime or asking refineries working with imported oil to switch to domestic alternatives to free up supply elsewhere.
Masson adds that promises like those are tricky to keep, because while the government can ask companies to take measures, it’s ultimately a private sector decision.
