As tankers sat at anchor outside the Strait of Hormuz and Qatar's LNG facilities burned in the opening days of March 2026, Asia's structural dependence on Gulf oil and gas was exposed — in real time, at full scale. The alternative supply infrastructure is already being built on Canada's Pacific coast. The investment opportunity window is now.
Energy security is, at its core, a geography problem. Robert D. Kaplan argued in The Revenge of Geography that geography shapes the limits of national strategy more than ideology. What is true of states is true of supply chains: the decisive question is not only where oil and gas originate, but the chokepoints they must traverse. Drawing on the sea‑power theories of Alfred Thayer Mahan, Kaplan noted that whoever controls the world’s narrow passages ultimately governs the flow of commerce. That logic has returned with full force to the Persian Gulf.
The Strait of Hormuz, only 33 kilometres wide at its narrowest, is flanked by Iran to the north and the UAE and Oman to the south. On March 2, 2026, Islamic Revolutionary Guard Corps (IRGC) adviser Ebrahim Jabari declared the strait closed and threatened to burn any ship attempting transit. Iran cannot defeat the U.S. Navy in open battle, but it can impose disproportionate costs through asymmetric tools: fast boats, missiles, submarines, and mines. U.S. naval superiority cannot eliminate this risk premium of traversing the strait during an active conflict. More critically for energy markets, even the perception of risk is enough to reprice every cargo that passes through it.
Canada's Pacific coast has none of these problems. No hostile actor can currently break any link in the supply chain running from Alberta’s oil sands to terminals at Vancouver, Squamish, or Kitimat – and onward to Yokohama, Ulsan, or Ningbo. Indeed, the North Pacific is among the world’s most stable shipping lanes, while Canada offers the political stability of a G7 democracy, strong property rights, and Indigenous partnership frameworks increasingly embedded in major energy projects. On a risk‑adjusted basis, Canadian oil and LNG should trade at a premium to Gulf supply. Events at Hormuz are now making that evident to every Asian energy minister.
Asia’s Hormuz Problem is Structural, Not Situational
On March 1, 2026, almost 150 oil and LNG tankers sat anchored outside Hormuz – engines running, cargoes stranded, insurance collapsing. Major shippers halted transits, Brent crude surged 10 per cent overnight, and Iran broadcast ‘do not pass’ warnings over VHF radio. The world’s most important energy chokepoint, carrying roughly 20 per cent of global seaborne oil and LNG, was paralyzed – and the economies of Asia are by no means immune.
Asia’s dependency on the Gulf’s energy is not merely heavy—it is concentrated. According to the US Energy Information Administration (EIA), China, India, Japan, and South Korea account for nearly 70 per cent of all Hormuz crude flows. Nearly half of India's crude oil imports and approximately 60 per cent of its natural gas pass through this single waterway. For decades, governments in Asia have treated this dependency as a situational risk managed through diplomacy and strategic reserves. Recent events have demonstrated that the vulnerability is structural. Closure is not even necessary; perception alone is enough to move markets, cancel policies, and strand tankers — and geography ensures that perception can be triggered at any time by a single hostile actor in possession of a few fast boats and a radio transmitter.
Saudi Arabia and the UAE do operate bypass pipelines capable of redirecting roughly 6.5 million barrels per day at maximum capacity, if these pipelines are not attacked. That said, combined Gulf flows through Hormuz ran at 20 million barrels per day in 2024. Even at full capacity, these bypasses account for a mere 32 per cent per cent of Gulf supply. And there is no bypass for LNG at all. Qatar is the world’s largest LNG exporter, and every molecule of Qatari gas that travels to Asia must pass through the Strait of Hormuz as liquefied cargo. Compounding the Qatari conundrum, Iranian drones that struck Ras Laffan Industrial City, Quatar’s main LNG production site, on March 2, 2026, forced a halt to all LNG production in that Gulf state.
As recent events are fast demonstrating, there is no technological fix for geography. There is only a different map. The insurance market moves faster than navies, and it has already delivered its verdict. War-risk premiums for Hormuz transits have quadrupled; for a super tanker, that means a single voyage now costs US$2 to US$3 million to insure, and in many cases coverage cannot be found at all. Analysts at Rapidan Energy Group have described this scenario as a potential crisis with three times the severity of the 1973-74 Arab oil embargo.
The Counter-Geography: Canada's Pacific Coast
In Asia's Cauldron: The South China Sea and the End of a Stable Pacific, Kaplan also wrote that while Europe is a landscape, East Asia is a seascape. His point was that the critical contests of the 21st century would be fought not on land borders but at sea — at the chokepoints, straits, and passages that connect the world's great centres of production and consumption. The geoeconomic implication is clear: the most strategically valuable oil and LNG supply chains of the 21st century will be those that traverse no contested chokepoints at all.
Oil: The Trans Mountain Expansion
Canada’s Trans Mountain Expansion (TMX) pipeline came online in May 2024, tripling crude capacity to 890,000 barrels per day from the oil sands of Alberta to the Westridge Marine Terminal at the Port of Vancouver. Since startup, the system has run at an average utilization of 82 per cent. Canadian crude oil exports to non-U.S. destinations have more than tripled, with Asian demand as the primary growth driver. Between May 2024 and September 2025, crude exports to Indo-Pacific markets went from virtually zero to an average of C$571 million per month — with Singapore, South Korea, Hong Kong, and India emerging as significant new buyers alongside China, which has become Canada’s second-largest oil consumer.
Crucially, these shipments do not transit the Strait of Hormuz, but travel across the North Pacific, a genuinely independent supply corridor. The Alberta-to-Zhoushan routing resolves, in one pipeline and one shipping lane, the Hormuz problem, as no Iranian drone can reach Fort McMurray or Westridge terminal.
LNG: A new Pacific supply base
LNG Canada Phase 1, located at Kitimat, British Columbia, shipped its first cargo in June 2025 – a milestone Canada's energy minister described as a watershed moment, coinciding with a trade war initiated by the only other major foreign market for Canadian energy. At full Phase 1 capacity, the facility will produce 14 million tonnes annually – enough to materially diversify the supply portfolios of Asian buyers currently over-indexed to Qatari LNG, which as of March 13th, 2026, still cannot be delivered. LNG Canada's cargoes depart directly into the North Pacific. There is no chokepoint, and no IRGC radio transmission can reach them.
LNG Canada is not the only West Coast LNG facility preparing to ramp up production. Cedar LNG – a 3-million-tonne-per-year floating facility at Kitimat, developed by Pembina Pipeline and the Haisla Nation and notable as the world's first majority Indigenous-owned LNG project — has reached final investment decision and is under construction, targeting service in 2028. Woodfibre LNG, a 2.1-million-tonne-per-year electrified facility near Squamish, B.C., is also under construction and targeting service in 2027. Both projects are designed to run on British Columbia's renewable hydroelectricity, giving them among the lowest emissions profiles of any LNG export facilities in the world. None of them are within range of hostile drones, nor do their shipping routes pass through contested waters.
The Investment Case
The infrastructure now moving through approvals will define Asian energy security for decades. Decisions made in 2026–2027 will lock in supply patterns until the 2070s.
A new West Coast oil pipeline is already in advanced planning. Supported by the Alberta and federal governments, the project that would carry approximately one million barrels per day of Alberta crude to the B.C. coast, likely to the Port of Prince Rupert. Importantly, Prince Rupert has the potential to load modern Very Large Crude Carriers (VLCC), which would further improve the unit economics. Alberta expects to submit the new pipeline project to Canada's federal Major Projects Office for designation as a project of national interest by July 2026. Prime Minister Carney has signalled strong federal support, and the project envisions significant Indigenous co-ownership.
LNG Canada Phase 2, meanwhile, would double the Kitimat facility's output to 28 million tonnes annually, positioning it as the second-largest LNG export facility in the world. It is currently at the Front End Engineering and Design (FEED) stage, with the contract held by the JGC–Fluor joint venture. Phase 2 has been referred to the Major Projects Office with a two-year approval pathway. A final investment decision from the joint venture – which includes Shell, Mitsubishi, Korea Gas Corporation, Petronas, and PetroChina – is expected in late 2026 or early 2027. Phase 2 alone is expected to attract C$33 billion in private-sector capital. And its emissions are projected to be 60 per cent below the global LNG average – a consideration that will matter to every ESG-conscious sovereign wealth fund at the table.
Ksi Lisims LNG – a proposed 12-million-tonne-per-year floating facility near Prince Rupert, developed by the Nisga'a Nation, Western LNG, and Rockies LNG – has received both its federal environmental assessment clearance and its British Columbia Environmental Assessment Certificate, and has been designated a project of national interest by Canada's Major Projects Office. Notably, TotalEnergies and Shell have each signed 20-year offtake agreements for a combined four million tonnes per year. The project's developers expect to reach a final investment decision in 2026, with the first LNG targeted for production in late 2029. If sanctioned, Ksi Lisims LNG would bring Canada's total Pacific LNG export capacity to more than 40 million tonnes annually by the early 2030s, transforming the country into a globally significant LNG supplier at the moment when Asian buyers are making decisions to alleviate Gulf dependency.
In the crude oil space, Trans Mountain is expanding even further. Drag-reducing agents which are polymer chemicals injected into the oil that dramatically reduce friction and allow the pipeline to move more product with the same infrastructure, are expected to add 85,000 to 90,000 barrels per day by 2027. Terminal dredging at Westridge, due for completion in late 2026 or early 2027, will allow versatile Aframax vessels to load 700,000 to 750,000 barrels per voyage, up from 550,000 – a structural improvement in per-voyage economics that will make Canadian crude progressively more competitive on Asian landing costs. In the medium term, 30 kilometres of new pipeline and 11 new pumping stations could add an additional 360,000 barrels per day to Trans Mountain’s capacity.
Opportunity in Practice
The governance structures of Asia's largest sovereign wealth funds, national oil companies, and energy ministries give these economies direct levers to act on what is happening right now. The argument from geography is clear. What are the opportunities?
First, off-take commitments. Long-term LNG purchase agreements from Asian buyers are the signal the LNG Canada Phase 2 and Ksi Lisims consortia need to trigger their final investment decisions (FIDs). Korea Gas Corporation is already a joint-venture participant in LNG Canada. Japan's JERA, Osaka Gas, CNOOC, INPEX, and major Indian importers should be actively at the table, as should Taiwanese and Singaporean national energy champions. The FID window for both projects is 2026 — this year. Any Asian buyer that secures a 40-to-50-year off-take agreement before these decisions close is purchasing insurance against the next Hormuz crisis at a price that will look extraordinarily cheap in comparison to LNG spot prices in a crisis.
Second, equity stakes in Canadian infrastructure. Cedar LNG is already the world's largest majority Indigenous-owned infrastructure project – a model that demonstrates how equity partnerships can be structured to align commercial returns with long-term supply security. The West Coast oil pipeline envisions comparable co-ownership structures, with room for strategic Asian equity. Japan, South Korea, and Singapore's Temasek have all made infrastructure investments in Canada in the past; an equity stake in a pipeline delivering one million barrels a day to Canada’s Pacific coast is a structural hedge that no futures position can replicate.
Third, direct government-to-government frameworks. A strategic energy and trade co-operation agreement between Canada and China was signed during Prime Minister Carney's recent Beijing visit. Similar negotiations are proceeding with India, Japan, and Singapore. As Canada is actively seeking to diversify its trade relationships away from U.S. dependency, the alignment of interest between Canada's diversification imperative and Asia's energy security imperative has never been stronger.
A New Map, a New Future
Kaplan warned that while geography is not destiny, world leaders ignore it at their peril. The tankers stranded at Hormuz and the disabled LNG facilities at Ras Laffan are not anomalies. They are stress tests showing what happens when global energy security rests on a chokepoint flanked by a hostile power.
The infrastructure that can change Asia’s energy geography already exists or is being built: TMX, LNG Canada Phase 1 and 2, Cedar LNG, Woodfibre LNG, Ksi Lisims LNG, and a new West Coast pipeline. Asian policymakers and investors who act now will lock in secure supply for half a century. Those who wait will face a seller’s market shaped by buyers who internalized the lessons of 2026 much sooner.
Canada has what Asia needs: oil and gas that transit no contested straits, originating from a trusted trade partner beyond drone range. The question is whether Asia will invest in the geography that solves the vulnerability geography created.
• Edited by Michael Roberts, Communications Director, APF Canada. The author also used AI tools in the initial drafting of this piece.
