Gas prices in Canada are seeing an increase as oil prices surge once again. The average cost of a liter of gas has risen to $1.674 across the country, up by 3.4 cents compared to last week. Patrick De Haan, the head of petroleum analysis at GasBuddy, anticipates that prices could further climb to around $1.70 per liter by the end of the day, with Canadians likely facing an increase of five to 10 cents per liter in the coming days.
The escalation in oil prices is primarily attributed to the U.S. conflict with Iran, causing tensions to rise following a breakdown in the Middle East ceasefire. Brent crude reached over $86 US per barrel early Tuesday before slightly dropping to just above $84 per barrel midday. This surge comes after a period of fluctuation where Brent crude fell to the low $70 US range but remained below previous highs during the conflict.
De Haan mentions that gas prices typically take a few days to fully reflect such market shocks, but the ongoing volatility in Iran makes it challenging to predict the final impact on pump prices. If the U.S. and Iran continue their hostilities, De Haan believes that price increases may extend beyond the current week.
Simultaneously, disruptions in Russia’s oil infrastructure are adding pressure to the market. Recent strikes by Ukraine on Russian refineries and storage facilities have significantly impacted Russia’s refining capacity, affecting the oil industry from upstream to downstream operations. Consequently, the International Energy Agency has reduced its oil production forecasts for Russia this year by three percent.
GasBuddy’s De Haan notes that the impact of Russia’s situation is particularly evident in the Atlantic provinces of Canada, where prices are now surpassing those in British Columbia. This trend is due to the increased demand in Europe following the loss of Russian oil products. As a result, areas like Newfoundland and Labrador, Prince Edward Island, and Nova Scotia are experiencing higher gas prices compared to British Columbia.
Considering the ongoing market dynamics, De Haan advises drivers to fill up their tanks sooner rather than later to save on costs amid the rising gas prices.