Canada’s energy sector will see continued headwinds in the near-term after a rocky end to 2025, according to Enserva’s State of the Industry Report. The report illustrates an oil sector that was forced to navigate some unpredictability mid-year, and one that will likely see the trend continue into 2026 — regardless of an expected memorandum of understanding (MOU) between the provincial and federal governments. “Canada’s energy industry is navigating a period of adjustment,” Enserva president Gurpreet Lail told reporters. “But we’re cautiously optimistic. It’s not all doom and gloom — but ‘cautiously’ is a key word here.” Enserva represents oilpatch service companies. It partners with major producers across the province to organize and advocate for the work being done in oil and gas. Its latest annual report, unveiled Wednesday, comes a day before Prime Minister Mark Carney is scheduled to make an announcement in Calgary. Sources tell CTV News it will involve an agreement with the province that could pave the way for another pipeline to the West Coast. “I’m hopeful,” said Tristan Goodman with The Explorers and Producers Association of Canada. “It shows we are trying to figure out how to be open for business.” Frozen ground If it is approved by Ottawa, the pipeline is coming at a strange time for the industry. WTI and WCS prices declined substantially in 2025 relative to 2024, and none of the three major forecasting agencies expect them to recover before 2029. “Upstream oil and gas capital spending is expected to decline by 5.6 per cent by the end of 2025, and 2.2 per cent in 2026,” according to the annual report. Drilling activity in Alberta — down seven per cent this year and predicted to drop four per cent next — and the overall employment picture is also bleak, says Enserva. A lot of that is due to a unique political year for the sector. A new administration in Canada has led to new environmental and economic policy, while threats of Alberta separation had some investors bearish on the market in the early-to-middle part of 2025. But perhaps nothing was more impactful to the industry than a new President south of the border. Donald Trump and his tariffs have led to unpredictability in both oil supply and demand, and his foreign policy — specifically around Venezuala — could soon throw the market into turmoil. “Recent OPEC production increases have applied downward pressure on oil prices,” the report reads, “and U.S. trade policies continue to challenge Canada’s export competitiveness.” Reason to drill The report does cast some doubt on upcoming oil forecasts, but there is some optimism around natural gas. A lot of that is due to renewed demand that is only expected to ramp up. A number of Canadian LNG projects are currently in development — including multiple new builds in B.C. And while oil capacity isn’t currently a pressing need, experts are confident an approved pipeline can put the industry on the same track as gas. “We currently have sufficient pipeline capacity to deliver all of the planned production growth that is expected in the basin,” BMO Capital Market head Randy Ollenberger said. “But I think the key thing to remember here is that we could actually be producing 3.8 million barrels a day more.” “So, what we want to see is that there’s real intent behind the MOU to actually move something forward, and it’s not just based on a nicety, but on facts,” Lail added. The report predicts global oil demand will reach record levels, largely led by growth in emerging Asian economies like India and Thailand.
