Good morning, everyone.

On Wednesday, Iran’s Islamic Revolutionary Guard declared it had taken control of the Strait of Hormuz, the narrow waterway that links the Persian Gulf with global markets.

That’s the same day, staring down expected lower global stockpiles as the U.S. and Israel’s war with Iran threatened to spiral out of control, Goldman Sachs raised its second-quarter oil price forecast for Brent crude by US$10 a barrel to US$76.

And while Canada will be mostly insulated from the turmoil, Canadians are already feeling the effects at the gas pumps, with the average price jumping more than 11 cents a litre this week, topping $1.42.

But as The Globe’s Rita Trichur argued in her column, geopolitical uncertainty reinforces the need for more Canadian energy.

“The Middle East conflict is yet another reminder of why Canada must prioritize long-term projects that increase energy security. Its failure to do so has already resulted in missed opportunities for the oil and gas sector,” she wrote.

And while much of her column focused on the expansion of the Port of Churchill in Manitoba, Alberta – Canada’s largest energy producer – certainly has a role to play.

Premier Danielle Smith, while making it clear that she hopes the war ends quickly, said this week the unrest in the Middle East strengthens the case for pipeline expansion, which could alleviate pressure on Asian markets that buy much of the oil caught in the bottleneck.

“We’re here to help. But part of the way in which we can help is, of course, with expansions to the West Coast pipelines,” she said Monday at an unrelated press conference.

It is no mystery that as the price of oil rises, the fiscal situation in the province follows.

Last week’s budget predicted a deficit of $4.1-billion this year, skyrocketing to a deficit of nearly $9.4-billion next year.

The budget for next year was built on projections of West Texas Intermediate – the North American benchmark oil price – at an average of US$60.50 a barrel in the upcoming fiscal year. WTI prices closed on Thursday at US$81.01, its highest since July, 2024.

Given that the government’s numbers show that for every $1 drop in the price of oil, provincial coffers take an approximately $680-million hit, the province’s dire fiscal outlook could improve, at least in the short term.

How the province deals with the change in fortunes remains the question.

As The Globe’s editorial board argued this week: “For decades, the provincial government has used resource revenues to pay for current consumption, rather than converting petrodollars into financial wealth, for future generations.”

As the editorial board highlighted, since 1976, $18.7-billion has been deposited in the Alberta Heritage Savings Trust Fund – but more than double that amount, $45.8-billion, has been withdrawn.

While the Smith government has made a concerted effort to boost the fund, promising to hit its 2050 target of $250-billion, the province has a history of dipping in when needed.

The stewards of Alberta’s economy must once again navigate the ups and downs of variables well outside its control because the only thing certain about global uncertainty is that it will persist.

This is the weekly Alberta newsletter written by Alberta Bureau Chief Mark Iype. If you’re reading this on the web, or it was forwarded to you from someone else, you can sign up for it and all Globe newsletters here.