A cargo ship seen near the Strait of Hormuz last month.Stringer/Reuters
Several energy fund managers are still bullish on oil even if the Iran war ends, saying that January’s US$60-a-barrel oil price is history. But they have different playbooks to navigate the uncertainty.
Energy funds have benefited from higher oil prices after Iran effectively blocked the Strait of Hormuz on Feb. 28 to retaliate against bombing attacks from the U.S. and Israel.
West Texas Intermediate (WTI) crude oil futures, which surged to an intraday high of US$119.48 a barrel in March, traded Monday around US$100 a barrel amid fears of supply shortages.
“This is the worst energy crisis of our lifetime, but it is critical to have a medium-term view and not trade the headlines,” says Eric Nuttall, senior portfolio manager at Ninepoint Partners LP in Toronto.
“I am focused on what the day after looks like, when peace eventually breaks out,” says Mr. Nuttall, who oversees Ninepoint Energy Fund and Ninepoint Energy Fund Series ETF NNRG-NE.
The U.S. and Iran agreed last week to a two-week ceasefire, but initial talks fell apart on the weekend. U.S. President Donald Trump then ordered a blockade of the strait starting Monday for ships entering or leaving Iranian ports.
Closure of this chokepoint, through which one-fifth of global oil and liquefied natural gas flows, has caused oil production shut-ins in the Gulf region. Repairing energy infrastructure, including refineries hit by Iranian missiles, could take months.
“Energy stocks now look wildly compelling in that environment,” Mr. Nuttall says. “We want to be meaningfully exposed to oil names.”
Given that WTI oil will likely include a political risk premium in the future, he’s using US$80-a-barrel for next year in investment decisions.
Middle East oil output has fallen by a “staggering 13-million barrels a day,” he says. Given expected delays for the Strait of Hormuz to return to normal traffic and global inventories continuing to decline, there is potential for a “meaningful price shock,” he says.
That shock hasn’t occurred yet, partly because of a cushion in March from the biggest release in history in global strategic petroleum reserves, he says. But countries need to replenish those reserves, while some, including India, will likely add to their emergency stockpile.
Mr. Nuttall, whose fund was 75 per cent in natural gas stocks a year ago, began raising his oil exposure in late 2025 after he thought the consensus view of a massive oil glut was overblown.
With the Iran conflict, he now has invested 90 per cent of his fund in 11 mostly Canadian-listed oil stocks, with the rest in cash. His holdings include Strathcona Resources Ltd. SCR-T, Whitecap Resources Inc. WCP-T, Athabasca Oil Corp. ATH-T and Ovintiv Inc. OVV-T, which recently acquired NuVista Energy Ltd.
Because Canada has large and long-dated energy reserves, it will be seen by global oil buyers as a “reliable supplier of choice,” Mr. Nuttall says.
Betting on service providers
David Szybunka, senior portfolio manager and managing director of the energy team at Canoe Financial LP in Calgary, also says WTI oil will settle at a higher price than before the war.
That will spur companies to start a new capital-spending cycle globally to explore and grow production in oil and natural gas, says Mr. Szybunka, who oversees Canoe Energy Portfolio Class fund.
Since the war began, he has lowered his fund’s oil-producer weighting to about 15 per cent from 40 per cent to make a bigger bet on global oil service providers and energy royalty plays.
His oilfield service names, now 30 per cent of his fund, include new additions such as SLB Ltd. SLB-N (formerly Schlumberger), Halliburton Co. HAL-N and Weatherford International PLC WFRD-Q.
Mr. Szybunka raised his royalty exposure to 15 per cent of his fund by adding to his holding in PrairieSky Royalty Ltd. PSK-T, which leases land to oil and gas producers.
Integrated oil companies and large-cap Canadian oil names have performed well this year, but “I just don’t think that’s going to be where the puck is going,” he says.
Energy was already a top-performing sector before the war because many investors began rotating into this attractively valued sector on concerns about the negative impact of artificial intelligence on software companies trading at richer valuations, he notes.
But AI also needs lots of power, so “that’s why we continue to have a 35-per-cent weight in natural gas,” Mr. Szybunka says. “It will come back to the forefront as the geopolitical conflict subsides.”
Curtis Gillis, portfolio manager and research lead for equities at CI Global Asset Management in Toronto, is medium-term bullish on oil and expects a post-war WTI price of US$70 to US$80 a barrel.
That embeds a risk premium of US$5 to US$10 a barrel because “all bets are off” Iran will not block the Strait of Hormuz again, says Mr. Gillis, who runs CI Global Energy Corporate Class fund.
Entering 2026, he planned to raise his fund’s oil weighting by mid-year on expectations of a tighter supply-demand imbalance, partly because of the summer driving season, but the war fast-forwarded that outlook.
Because energy companies are focused on returning cash to investors through dividends and share buybacks rather than growing production, the risk is they may not be spending enough to offset declining oil fields and demand growth, he says.
There will be a focus on other sources of supply growth, including Canada’s oil sands, the Organization of Petroleum Exporting Countries and offshore, Mr. Gillis says.
Since the Iran war began, he cut his utilities and renewables exposure by 5 per cent to raise his oil-focused holdings to about 65 per cent.
His additions include SLB, which also provides technology to Middle East oil companies; Norway-based TGA ASA, a provider of seismic data to the energy industry; and United Arab Emirates-based ADNOC Drilling Co., the largest Middle East driller.
Mr. Gillis is hopeful the ceasefire will work, but has a “healthy dose of skepticism” because of Iran’s demands, particularly in having control over who enters the Persian Gulf. After the ceasefire began, Iran began charging an unofficial toll fee.
If this conflict drags into the summer, the WTI oil price could reach US$150-plus a barrel, Mr. Gillis says.
“I prefer prices to stay in the US$80-$90-range,” he says. “That’s the golden spot to provide strong returns for oil and gas companies, but not high enough to damage consumer spending, discretionary spending and be a drag on the economy.”
Editor’s note: This article has been updated to include performance data for three mutual funds. A previous version showed the performance for one exchange-traded fund.