Canadian oil and gas executives and industry veterans who gathered in Houston this week for the world’s largest energy conference said the mood was far from celebratory. This, despite oil prices surging roughly 40 per cent this month and tentative signs Canadian pipeline projects may be gaining momentum.

“There’s no jumping for joy, especially because the cause of it is conflict,” said Tamarack Valley Energy Ltd. chief executive Brian Schmidt from Houston.

Before the Feb. 28 attack on Iran by the U.S. and Israel, much of the oilpatch — including Tamarack — had expected prices to average around US$60 a barrel this year.

But fighting in the Middle East has effectively shut the Strait of Hormuz — a critical waterway for global energy trade — sending prices briefly above US$119 last week. With no clear indication of when flows will resume, analysts warn prices could reach fresh highs in the weeks ahead, potentially exceeding US$150 per barrel.

Despite broad expectations of a first-quarter windfall in profits, producers are likely to be cautious about hiking capital spending plans while the situation in the Middle East remains volatile, Schmidt said.

“No one to this point has adjusted capex yet,” he said, referring to the industry term for capital spending. “But I think companies are starting to look. Because the more (oil) storage we burn off, the longer this situation stays, the more the price is not going to go back to $60. It’s going to go to something higher.”

The CERAWeek conference concluded Friday with markets still reeling after U.S. President Donald Trump extend a deadline for talks with Iran until April 6.

Analysts warn that even if a truce is reached quickly, the cumulative supply losses and damage to Middle East infrastructure could keep oil prices higher for longer.

“We are into a new floor on oil,” said Tristan Goodman, president of Explorers and Producers Association of Canada.

At the CERAWeek conference, a large delegation of Canadian officials and industry leaders said the crisis is reinforcing the country’s reputation as a stable and reliable supplier, drawing renewed interest from policymakers and investors.

Executives from both oilsands giants and conventional energy firms said they saw rare harmony in the message delivered at the conference by the Alberta and federal governments. Both Premier Danielle Smith and federal Minister of Natural Resources Tim Hodgson boasted about Western Canada’s vast oil and gas reserves — an estimated 177 billion barrels of oil that could be produced economically at today’s prices.

“There is an idea emerging that the world has changed,” Mike Verney, executive vice-president of Calgary-based petroleum reserves audit firm McDaniel & Associates Consultants Ltd., said of the discussions at this year’s CERAWeek.

“But it sucks that you needed the crisis in Ukraine and now this crisis in Iran to remind the world that we need energy security.”

Smith publicly highlighted South Bow Corp.’s proposed cross-border pipeline project with private U.S. firm Bridger Pipeline LLC. She suggested Tuesday that the partnership with U.S. backers could help with permitting the project, which is piggy-backing on leftover Keystone XL assets.

Enbridge Inc. chief executive Greg Ebel suggested the company could be open to helping to build a new oil pipeline to the West Coast under the right regulatory conditions. “I wouldn’t say a hard no,” Ebel said in an interview Tuesday in Houston with Bloomberg Television.

“What I would say is the conditions don’t yet exist for that pipeline to be built,” he added.

Ebel’s comments underscored the hurdles that remain before a new export pipeline project can move forward.

This week the province and Ottawa struck a tentative deal on reducing methane emissions, a key pre-requisite under the memorandum of understanding signed by the two governments last November that could eventually see a new oil pipeline to the West Coast approved.

But key agreements on a carbon-pricing regime and a multibillion-dollar oilsands carbon capture project are still outstanding, and both sides have hinted that they won’t be ready by the April 1 deadline, with more negotiations needed.

A new TD Cowen survey published Friday suggests that investors in the Canadian pipeline industry are broadly interested in growth projects, but may be more likely to reward companies that pursue low-risk expansions over bold bets on new export projects.

“We understand the clarity that capital allocators need to build either brownfield or greenfield investments,” Hodgson told a CERAWeek audience.

“We’ve told our oil industry we’re happy to have you grow, if you produce the lowest carbon-intensity barrels you can.”

mpotkins@postmedia.com