As oil prices sink to their lowest levels in four years and the risk of a global recession grows, Canadian oil and gas executives are keeping a steady hand on the wheel. Rather than slashing production or capital spending in a panic, leaders in the industry are signaling caution, discipline, and a long-term view — even as pressure mounts from markets and policy uncertainty on both sides of the border.
Brent crude and West Texas Intermediate (WTI) prices have fallen sharply since early April, with WTI hovering around $60 per barrel. The slide began following new U.S. tariffs that rattled global markets and intensified fears of a broader economic slowdown. While Canada avoided direct energy-related tariffs, new restrictions on steel and autos — key sectors supporting the oil patch — have cast a long shadow over sentiment.
Despite the market turbulence, Canadian oil and gas companies are not rushing to shut wells or shelve projects. Doug Bartole, CEO of InPlay Oil, said in an interview that his company has no immediate plans to reduce production or capital spending, but he acknowledged that everything is subject to change if prices continue to fall.
“Don’t make any rash decisions,” Bartole said. “Let’s take a longer view of things and see where it all settles out. But obviously, if we see $50 oil or worse, that changes things. We’re small, we’re nimble — we can adjust quickly if needed.”
ATB Capital Markets recently downgraded its price target for InPlay, citing the pressure from weakening WTI prices. Still, analysts note that Canadian production is expected to grow modestly this year, although that outlook depends heavily on how long the current price softness lasts.
Jon McKenzie, CEO of Cenovus Energy — one of Canada’s largest oil sands producers — echoed the call for restraint but said the sector is well-practiced in adjusting during downturns.
“My suspicion is that most companies will work to invest through this cycle,” McKenzie said. “In price downturns, this industry does a really good job of shedding costs. We’ll probably see some cost reductions throughout the industry.”
The oil sands, known for their long-cycle projects and higher upfront capital, have historically been more resilient in price downturns than shale plays. But smaller, higher-cost producers — particularly in conventional basins — could be forced to scale back activity if the downturn is prolonged. The first signs of that typically show up in the drilling sector.
Mike Rose, CEO of Tourmaline Oil, said his company is keeping its capital plans intact for now, but acknowledged that lower-for-longer pricing could force a shift.
“If we do go into a recession and prices stay weak, it could definitely affect our plans,” Rose said. “But we’re not reacting just yet.”
Peter Tertzakian, longtime energy economist and founder of Studio.Energy, pointed out that many Canadian producers can survive at lower oil prices — especially the large, integrated firms. But growth is another matter.
“It’s not about whether they can stay afloat. It’s a question of whether there’s enough [cash flow] to grow,” Tertzakian said. “If $61 to $62 oil is sustained for the rest of the year, we’re not likely to grow very much.”
For energy workers — particularly those tied to service companies and drilling operations — the implications are more immediate. Eric Nuttall, senior portfolio manager at Ninepoint Partners, said he doesn’t expect a collapse in Canadian production this year, but warned that layoffs are likely if companies begin cutting discretionary spending.
“You’re going to see it in real time,” Nuttall said. “Companies are going to be proactive. Where there’s room to cut, they will cut — and that usually hits service jobs first.”
One unexpected bright spot could be natural gas. Chris Carlsen, CEO of Birchcliff Energy, noted that falling oil prices might indirectly help gas producers. Less oil drilling means less associated gas coming online, which could tighten supply in North America.
“If we’re drilling less oil, there’s less associated gas with that,” Carlsen said. “That could actually set us up for better pricing in the natural gas market.”
Still, most executives and analysts agree that the mood in the Canadian oil patch is one of guarded watchfulness. The sector has weathered price collapses, policy shifts, and public scrutiny over the past decade — and this cycle is no different in that regard.
What is different this time is the underlying discipline. Companies aren’t racing to drill just because prices hit $75, and they’re not abandoning ship just because it dips below $60. They’ve seen too many cycles to overreact.
Whether that measured strategy can hold through a potential recession is the next big test.
