Li Ka-shing's layout in the Canadian oil industry has gone through several ups and downs in oil prices and stock prices, yet after the sudden escalation of the situation in Iran in 2026, he once again became a big winner. Recent attention to the trends of major oil companies under the Iranian situation reminds people of the brilliant chess game he laid out forty years ago. Many people think that Li Ka-shing's core businesses are merely real estate, ports, and retail, but little do they know that he quietly laid out a super chess game in Canada forty years ago—from Husky Energy to Cenovus, and then to increasing stakes in MEG Energy during the 2025 downturn, step by step constructing a huge energy empire.
1986: Classic Bottom Fishing
At that time, the aftermath of two oil crises was still unresolved, compounded by increased production from Saudi Arabia, leading international oil prices to briefly drop below $10/barrel. Canada's Husky Energy, primarily engaged in heavy oil and oil sands, was heavily indebted and on the verge of collapse, prompting the market to sell off. Li Ka-shing acquired a 52% controlling stake for only HKD 3.2 billion through Hutchison Whampoa and family companies (increased to 95% in 1991). At that time, external parties questioned his 'takeover', given the high extraction costs of oil sands, difficult transportation, and significant environmental pressures, which seemed like a hot potato.
What was the result?
From the late 1990s until 2008, oil prices rose from over $20 to $140, and Husky turned losses into profits, successfully going public and expanding. The dividends and profits returned to the Li family far exceeded the initial investment.
Financial Crisis and Oil Price Collapse: Firmly Holding the Line
During the 2008 financial crisis, coupled with the oil price crash from 2014 to 2016, oil prices were halved multiple times, and Husky's stock price plummeted by 70%–80%. The Li family's assets once evaporated by hundreds of billions of HKD, and external parties again sang the praises of the 'sunset industry'. The impact of the COVID-19 pandemic in 2020 was even greater, with Brent crude oil briefly dropping to $19.9/barrel, leading to continuous losses for Husky. Li Ka-shing did not retreat but instead pushed for a merger between Husky and Cenovus, forming a new company with a daily production of 750,000 barrels of oil equivalent, with his family holding about 29%, still the single largest shareholder, and solid control of the board.
Looking at the various fluctuations, the core logic always revolves around the rotation of commodity cycles: oil prices are frequently disturbed by geopolitical and supply-demand news, causing severe short-term volatility. However, as long as the medium to long-term demand (industrial + consumption) and supply constraints remain, the operating leverage of oil companies can amplify profits. Husky and Cenovus did not rely on futures speculation but instead used technological iterations (SAGD steam-assisted extraction reduced oil sands costs to around $40/barrel) and a stable Canadian political environment, staying away from Middle Eastern hotspots, thus ensuring asset safety. Stock prices fluctuated with oil prices, but Li Ka-shing looked long-term, using acquisitions to lock in production capacity and cash flow.
2025: Another Victory
In 2025, oil prices fell again to around $60, and the market was shouting 'energy sunset', with investors rushing to sell. The Li family fully acquired the UK-listed MEG Energy through Cenovus for HKD 44.3 billion (about CAD 7.9 billion) — also located in Alberta's core oil sands area and downstream refining assets, with significant synergy, adding 110,000 barrels/day of low-cost production capacity.
Only a few months after the acquisition, at the beginning of 2026, the situation in Iran suddenly escalated, hindering shipping in the Strait of Hormuz and damaging some infrastructure in the Middle East. Brent oil prices surged to over $112 within two weeks, with institutions like Goldman Sachs raising the oil price center to the range of $95–115.
Current Landscape: Firmly Seated as a Winner
Cenovus's 2026 production guidance is 945,000–985,000 barrels of oil equivalent/day, just a step away from one million barrels. The Li family's total shareholding (CK Hutchison about 17% + Li Ka-shing personally about 12%) ensures solid control. Based on a conservative estimate of $100/barrel, the daily pre-tax cash flow approaches $100 million, and the annual operating net inflow easily exceeds $30 billion. More importantly, all core production capacities are located in Canada, far from conflict zones, allowing stable exports of crude oil to Asia (including the Chinese market). At the same time, Cenovus's stock price surged from last year's low of around $10 to over $25, with a market capitalization approaching $50 billion, and the Li family's holdings valued at over HKD 100 billion.
This 40-year layout is not merely about betting on a single rebound in oil prices but rather a pure cycle trend investment: every time global capital panicked and fled, driving oil prices to the floor, he countered by bottom fishing; when oil prices warmed up, cash flow exploded. With oil prices fluctuating and stock prices experiencing roller coasters, he was present at every low point. During the 2026 Iran Strait of Hormuz crisis, oil prices surged above $110, and his family's daily output approached one million barrels, instantly becoming the most stable winner in the global energy game.
This is a classic example of 'capital slow cooking' and cycle insight:
1) Heavy Investment at the Bottom—In 1986, he invested in Husky, twenty years later promoted the merger of Husky and Cenovus, and in 2025 acquired MEG Energy, each time acting when the market was most panicked and valuations were lowest;
2) Technology + Scale—Transforming oil sands from high cost to low cost, through acquisitions increasing daily output from hundreds of thousands of barrels to nearly one million barrels, fully amplifying operational leverage;
3) High-Quality Assets as a Stronghold, Facing Geopolitical Turbulence—Canadian assets are far from the Middle East, with any turmoil in the Strait of Hormuz causing others to cut supply while he maintains stable production at high prices.
Ultimately, the Li family's 40-year chess game in oil has validated the essence of cycle trend investment: it doesn't matter how oil prices rise and fall in the short term or how many times stock prices go on roller coasters. Instead, it is about collecting chips in advance at the bottom and waiting for demand recovery and geopolitical factors to resonate, sitting quietly on the sidelines while others panic. The situation in Iran in 2026 is merely another validation.
In the cycle of rotation, those who truly make big money are always those who dare to bet at the bottom, can strictly control risks (not using leverage, stabilizing cash flow), and patiently wait for the opportunity to explode.