Energy fund managers are maintaining a bullish stance on oil, even as recent price corrections and the resolution of the Iran conflict introduce market uncertainties. These professionals are strategically positioning their portfolios to capitalize on enduring trends and emerging opportunities within the energy sector.

Navigating Post-Conflict Oil Markets

Despite a retreat from January's price peaks, energy fund managers remain optimistic about oil's future. They anticipate a significantly altered global landscape following the Iran conflict, employing distinct strategies to manage inherent uncertainties. The conflict, initiated by Iran's response to bombing attacks, initially drove oil prices higher.

Long-Term Outlook and Investment Strategies

Eric Nuttall, senior portfolio manager at Ninepoint Partners LP, advocates for a medium-term perspective. He is focused on the post-conflict environment, viewing energy stocks as offering compelling value. Nuttall uses US$80 per barrel as a benchmark, acknowledging the persistent political risk premium.

The conflict's disruptions, including potential infrastructure repair needs and declining global inventories, could lead to price shocks. This is further exacerbated by the necessity for nations to replenish strategic petroleum reserves. Nuttall, who increased his allocation to oil stocks in late 2025, now holds a significant portion of his fund in Canadian oil equities, recognizing Canada's role as a stable supplier.

David Szybunka, senior portfolio manager and managing director at Canoe Financial LP, shares this optimism. He forecasts WTI oil settling at prices higher than pre-conflict levels, which he believes will spur renewed capital investment in oil and natural gas. His strategy has shifted from oil producers to global oil service providers and energy royalty companies.

Szybunka views the energy sector favorably, partly due to concerns about artificial intelligence's impact on other industries. He posits that AI's substantial power demands will ensure natural gas remains relevant. He also notes the sector's pre-conflict strength, indicating a broader investor shift towards value-oriented assets.

Focus on Value and Supply Chain Resilience

Curtis Gillis, portfolio manager and research lead for equities at CI Global Asset Management, also holds a medium-term bullish outlook on oil. He projects a post-conflict WTI price between US$70 and US$80 per barrel, incorporating a risk premium. The conflict prompted him to accelerate his fund's oil weighting increase due to anticipated supply-demand imbalances.

Gillis highlights that energy companies are prioritizing returning cash to investors, potentially impacting future oil production growth. The prevailing sentiment among these managers is that oil market fundamentals remain robust, even with geopolitical stabilization.

Their portfolio adjustments reflect a nuanced approach, with some focusing on producers and others on service providers and royalty plays. This strategy underscores a deeper market understanding, emphasizing long-term trends and geopolitical influences on supply and demand. The conflict has amplified risk management, guiding investments that account for political premiums and supply disruption risks.

The increased focus on Canadian oil underscores its potential as a reliable supply source. The move towards oil service and royalty plays indicates a sophisticated strategy for capturing energy sector value. The sustained interest in natural gas reflects its perceived essential role in the future energy mix.