Can Canada-India Trade Corridor Insulate Against $100 Oil?

Oil prices have climbed more than US$100 per barrel for the first time since 2021 as tensions involving Iran threaten shipping through the Strait of Hormuz, a route carrying approximately one-fifth of global oil supply, according to the International Energy Agency.

The crisis exposes a deeper vulnerability in global trade: the world's economy depends heavily on a handful of critical corridors and concentrated suppliers.

On the other side of the world, Canada and India have agreed on a comprehensive strategic energy partnership, anchored by a C$2.6bn uranium supply agreement and enhanced cooperation across renewables, hydrogen and critical minerals.

The deal was secured during Prime Minister Mark Carney's visit to Mumbai and New Delhi, the first bilateral visit to India by a Canadian Prime Minister since 2018.

Uranium supply secures nuclear expansion

At the centre of the agreement is a long-term uranium supply contract between Saskatoon-based Cameco and India's Department of Atomic Energy. Under the C$2.6bn deal, Cameco will supply nearly 22 million pounds of uranium to India between 2027 and 2035, supporting fuel requirements for the country's expanding nuclear fleet.

Tim Gitzel, CEO of Cameco, says: "Cameco is proud to be a strategic partner with India to help meet its civil nuclear fuel needs and support its trade relationship with Canada. India is embarking on an ambitious nuclear expansion to power its development plans and meet the future energy security needs of its people."

Narendra Modi, Prime Minister of India, highlighted the scale of the agreement following talks in Delhi. "In civil nuclear energy, we have reached a landmark deal for long-term uranium supply. We will also work together on small modular reactors and advanced reactors," Modi says.

The reference to small modular reactors and advanced reactor technologies could signal broader collaboration beyond fuel supply, potentially spanning next-generation nuclear design and deployment. Carney positioned Canada as a reliable long-term supplier of nuclear fuel to support India's clean energy transition and energy security.

Critical minerals and broader energy cooperation

Energy cooperation extends to critical minerals, a sector central to both countries' industrial strategies and supply chain resilience. India's Ministry of Mines and Canada's Department of Natural Resources signed an MoU on critical minerals value chains, covering exploration, mining, processing, investment promotion and technical exchange.

Both governments signed an MoU on renewable energy cooperation between India's Ministry of New and Renewable Energy and Canada's Ministry of Energy and Natural Resources. The agreement promotes technical collaboration in solar, wind, biomass, waste-to-energy, small hydropower and energy storage.

Hydrogen is another pillar of the partnership. Simon Fraser University and the Hydrogen Association of India signed an MoU to advance joint hydrogen research, innovation and technology development.

Trade targets and strategic context

The energy agreements sit within a broader trade framework. Both sides confirmed that negotiations towards a Comprehensive Economic Partnership Agreement will conclude by the end of 2026.

"Our target is to reach US$50bn in bilateral trade. This is why we have decided to finalise a comprehensive economic partnership soon," Modi says.

The visit produced more than C$5.5bn in commercial partnerships. Elk Valley Resources of British Columbia signed MoUs with multiple Indian steel producers to discuss new sales of 1.2 million tonnes of metallurgical coal worth approximately C$285m.

India is seeking to reduce reliance on Russian energy imports and expand domestic clean generation. Canada, as a major producer of uranium, LNG and critical minerals, offers supply security aligned with India's growth trajectory.

Following military escalations in the Middle East, India's focus on energy diversification has shifted into higher gear. The C$2.6bn uranium deal with Saskatchewan's Cameco is increasingly viewed not merely as a trade agreement but as a cornerstone of India's Atmanirbhar Bharat initiative.

By locking in 22 million pounds of uranium through 2035, India could effectively insulate its expanding nuclear fleet from the price shocks currently affecting fossil fuel markets.

With uranium deliveries scheduled to begin in 2027, the partnership is evolving into a potential blueprint for how two G20 nations can diversify their economies through integrated supply chains in the face of a volatile global landscape.