ANALYSIS | Canada's windfall from high oil prices could offset losses from tariffs | CBC News

Even as Trump tries to squeeze Canada, Iran war's oil industry impact sends billions to this country's coffers

Canadians are well aware of the damage U.S. President Donald Trump has inflicted on this country by signing off on tariffs targeting about $27.6 billion in Canadian products.

In fact, the extra money now flowing into Canadian coffers — for context, Canada supplied the U.S. with more than 60 per cent of its crude oil imports last year — will go a long way to making up tariff losses, and could end up more than compensating for them.

But the resumption of hostilities has been followed by new successes for Iran's regional allies, and oil has returned to where it was at the height of the Hormuz crisis. Brent crude hit nearly $110 US when trading opened on Friday morning.

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The island sits across the Bab al-Mandab, the "Gate of Grief" that connects the Red Sea with the Indian Ocean. (Its name comes from its perils for mariners — now magnified by Houthi missiles.) Saudi jets pounded the Houthis' new positions as the week closed, but they had already consolidated their hold.

Houthis seize strategic island, Saudis close pipeline as fighting escalates

Saudi and Yemeni officials expressed shock at their enemies' rapid gains. On Thursday, the Trump administration had refused urgent Saudi requests for direct U.S. strikes to slow the Houthis.

Saudi oil is concentrated in its Eastern Province, bordering the Persian Gulf. But since the outbreak of war, that eastern coast and its sea outlet at the Strait of Hormuz are vulnerable to attack by Iranian drones and missiles. The Saudis have responded by diverting oil from Persian Gulf ports some 1,200 kilometres across the country through the Petroline pipeline to Yanbu, on the country's western Red Sea coast, and loading it onto tankers there.

But in August, Houthi missile attacks caused that traffic to slow dramatically. Instead of heading south from Yanbu, tankers started going north through the Suez Canal into the Mediterranean. That added time and expense, because the Suez Canal isn't deep enough to handle a modern fully-laden oil tanker. But at least the oil could move — as long as the Petroline kept bringing oil to Yanbu.

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On Thursday, Iran's allies — possibly Iraqi militias — scored direct drone hits on the Petroline, creating a plume of black smoke visible from space.