Canadians witnessed a surge in fuel costs nationwide this week due to the escalating tensions in the Middle East, leading to a spike in oil prices. The average retail prices in Canada reached 150 cents per litre by Friday evening, marking an increase of nearly 20 cents compared to the previous week’s 133.4 cents per litre, as reported by data from GasBuddy.com. British Columbia recorded the highest prices at 168.6 cents per litre.
The price hike follows the recent conflict between Israel, the United States, and Iran, which unfolded with attacks and retaliatory strikes. This resulted in casualties, mass evacuations, and a looming humanitarian crisis. Additionally, the conflict disrupted oil tanker traffic in the crucial Strait of Hormuz, a vital passage for a significant portion of global oil transportation.
In the U.S., benchmark crude oil prices surged to a two-year peak on Friday, surpassing $90 US per barrel for the first time since October 2023, as the conflict enters its second week.
Despite no reported fuel supply disruptions affecting Canada or the United States due to their substantial oil production, Gasbuddy petroleum analyst Matt McClain warned that consumers might experience inconvenience or potentially higher costs depending on the conflict’s outcome.
Concerned citizens filling up at gas stations expressed their apprehension over the rising prices. Amy Gooding from the Greater Toronto Area emphasized the necessity of gas but acknowledged the impact on other expenses. In Saint John, N.B., Bailey Jones echoed similar sentiments, acknowledging the inevitability of price hikes amid the ongoing conflict.
Projections for Prolonged High Prices
Energy policy expert Warren Mabee from Queen’s University suggested that elevated prices could persist even if the conflict concludes within weeks, as predicted by U.S. President Donald Trump. Historical trends indicate that price disruptions tend to linger post-conflict, hinting at potentially disrupted prices for a few months.
While the extent of the price escalation remains uncertain, Mabee anticipates a moderate increase of five to ten percent above pre-conflict price levels.