By Anil Wasif

April 8, 2026

That waterways — including straits — have a way of deciding which countries rise and which ones fall was a “known known” of history long before the Strait of Hormuz became the 21-mile-wide flashpoint of American foreign policy failure.

In her 2020 book Sinews of War and Trade, historian Laleh Khalili traced this pattern from the Portuguese in the sixteenth century to the present, showing how control of narrow waterways was a mechanism of imperial power long before oil was the commodity at stake.

With a two-week cease-fire in the Middle East war catalyzed by Donald Trump on February 28 now tentatively agreed and a plan for permanently reopening of the Strait under negotiation (its fragility evident in the re-closure of the Strait at this writing), the economic, political, and geopolitical fallout from this crisis may continue to be felt, including in Canada, for months if not years.

In late February, the fuel cost for a Boeing 787-9 flying from Vancouver to Hong Kong was roughly $71,485. By mid-March, it was $111,171. WestJet has since announced a $60 surcharge on companion voucher bookings, consolidated flights on lower-demand routes, and cut its April schedule by 1% and May by 3%.

Last week, JPMorgan CEO Jamie Dimon launched his American Dream Initiative, a domestic resilience program for housing, small business, and workforce development. When the CEO of the largest bank in America starts talking like FDR, it tells every serious actor in the global economy to start building buffers against choke-point failure. A point he reiterated at length in his annual letter to shareholders this week.

Policy columnist Jeremy Kinsman, who has served as Canada’s ambassador to Russia, the UK and the EU, drew the Suez parallel in Policy on March 20th. And longtime CBC Parliamentary Editor Don Newman laid out the Alberta oil and pipeline implications in his Policy column the following day.

Because of the “Lloyd’s of London angle”, the Strait of Hormuz cannot be reopened through military force alone. Jason Bordoff of Columbia University’s Center on Global Energy Policy explained this issue to journalist Ezra Klein on his New York Times podcast recently: one drone strike on one tanker is enough to cancel insurance for the entire corridor, and without insurance, ships do not move.

Munro Anderson, a maritime war insurance specialist at Vessel Protect, explained the risk context: the closure is based primarily around perception of threat rather than a tangible blockade. George Friedman of Geopolitical Futures traced the same logic from the military side, arguing that drone technology has extended Iran’s range far beyond any ground force perimeter. In a press conference, Donald Trump acknowledged the problem in his own terms: even after destroying Iran’s navy, air force, and radar, he said, a single truck carrying water mines could close the strait again.

Alpine Macro, Oxford Economics’ investment research arm, ranked emerging market vulnerability across oil intensity and Gulf dependence and found Asia at the epicentre, with Thailand, the Philippines, and India facing the most acute strain.

As Policy contributor Rupak Chattopadhyay warned a month ago in his piece, Beyond Oil: The Wider Supply Shocks of the New Gulf War, it wouldn’t be long before this became bigger than oil. Now, Gulf states that import up to 90% of their food, most of it via the strait, are airlifting staples and rationing water.

Máximo Torero, the chief economist of the UN Food and Agriculture Organization, has warned that farmers now face a dual cost shock: more expensive fertilizers alongside rising fuel costs affecting the entire agricultural value chain.

When the CEO of the largest bank in America starts talking like FDR, it tells every serious actor in the global economy to start building buffers against choke-point failure.

It is planting season, and Fatih Birol, Executive Director of the IEA, warned that April will be materially worse than March because pre-war cargoes have now been exhausted. When the food price shock arrives, diesel will carry it into Canadian grocery aisles the same way it carries everything else.

Canada’s position in this crisis is not just that of a bystander absorbing costs. Enverus modelling reported in the Financial Times shows Canadian oil producers could see revenues increase by C$25 to C$30 billion for every $10 rise in crude, with total windfalls reaching C$90 billion at recent price levels.

Canada is a choke point-free energy supplier at a moment when the world’s most important choke point is a conflict hostage. The windfall and the wound arrive together: higher revenues in Alberta, higher prices at the pump in Ontario, a Bank of Canada caught between inflation and recovery.

The calendar is forcing the question of what to do with that position. July 1 triggers both the CUSMA six-year review and the deadline under the Ottawa-Alberta MOU for the province to submit a pipeline proposal carrying bitumen to a West Coast port for Asian markets.

Before Hormuz, that proposal was a long-term infrastructure play tangled in carbon-capture funding and private sector sponsorship. After Hormuz, it is an energy security proposition. The trilemma I have written about in previous columns, access, autonomy, and alternatives, now applies to the energy file as much as the trade file, as two of the country’s most consequential economic files land on the same desk on the same day.

French historian Jean-Baptiste Fressoz offers a frame for holding these tensions together, one that Vaclav Smil at the University of Manitoba has been building with quantitative precision for two decades. In More and More and More, Fressoz argues that energy does not transition but accumulates.

We never replaced wood with coal. We never replaced coal with oil. We stacked them. The pattern persists because energy sources are symbiotes, not substitutes. The Hormuz crisis is confirming this thesis. The disruption that strengthens the case for renewables also makes fossil fuel extraction more profitable than at any point in a decade.

Capital markets are already pricing this in. Royce Mendes, Managing Director & Head of Macro Strategy at Desjardins, presenting at the Global Risk Institute last week, documented record inflows into Canadian fixed income and equities, with foreign buying of Government of Canada bonds at historic levels. European and UK investors have increased foreign direct investment after seven years of soft numbers, with Canadian pension funds redirecting the marginal dollar homeward as U.S. Treasuries lose their safe-haven reliability.

Mendes described Canada’s fiscal position as the cleanest shirt in the dirty laundry basket. The underlying logic was simple: we have the things that people want. “Gold had been shining,” he said. “Now it is oil. At some point it will be critical minerals.”

For Prime Minister Mark Carney, the political challenge could soon look like choosing between fossil fuel extraction and energy transition, but the policy challenge will be governing the accumulation.

He could start by convincing Albertans to recycle revenue from this payday into the kind of infrastructure that reduces the next choke point’s leverage over Canadian households; as argued by Carney himself in his 2021 book, Values. He hasn’t been quoting from it much lately, but it’s still on the bestseller lists.

Policy Columnist Anil Wasif is a public servant in the Ontario government. He serves on the University of Toronto’s Governing Council and the Advisory Board of McGill’s Max Bell School. Internationally, he serves on the OECD’s Infrastructure Delivery Committee and the Board of Trustees at BacharLorai Global. The views expressed are his own.