The price of Brent crude oil spiked above $126 US a barrel briefly, marking its highest level since March 2022, amid concerns over the U.S.-Iran talks impasse affecting the reopening of the Strait of Hormuz and the resolution of the Middle East conflict.
The price of Brent crude for June delivery has now retreated to around $111 US per barrel as of 4:15 p.m. on Thursday. Prior to the commencement of the conflict in late February, Brent crude was trading at approximately $70 US per barrel.
Simultaneously, gasoline prices continue to rise, with the average price per liter in Canada reaching $1.830 on Thursday afternoon, reflecting a 4.5-cent increase from the previous day and a 47.9-cent surge from a year ago. British Columbia recorded the highest prices, averaging slightly above $2 per liter.
Forecasts indicate further increases in prices. Predictions suggest that in the Greater Toronto Area, gas prices could reach $1.899 per liter, while Halifax and Edmonton might experience prices of $1.897 and $1.859 per liter, respectively.
In the U.S., the average gas price stands at around $4.375 per gallon. The ongoing conflict, characterized by Iran disrupting the Strait of Hormuz and the U.S. imposing blockades on Iranian ports, continues to drive oil prices up. Reports hinting at a potential escalation by U.S. President Donald Trump have dashed hopes for a swift resolution to the conflict.
Market analysts at ING Bank, Warren Patterson and Ewa Manthey, mentioned in a research note that the breakdown in U.S.-Iran talks and Trump’s purported rejection of Iran’s proposal for reopening the Strait of Hormuz have left the market skeptical about a quick resumption of oil flows.
Trading activities involving various oil contracts with different delivery dates are ongoing. In the most active segment of the Brent crude market, the price reached $114.70 per barrel for July delivery before retreating to around $110.40, slightly higher than pre-conflict levels.
Amid better-than-expected corporate earnings reports in the U.S., Wall Street remained stable near record levels. North American stock markets saw gains on Thursday, propelled by strong profit announcements from major companies like Alphabet. The S&P 500 surged by one percent, surpassing its previous all-time high, while the Dow and Nasdaq composite rose by 1.6 percent and 0.9 percent, respectively.
Companies such as Caterpillar, Eli Lilly, O’Reilly Automotive, and Royal Caribbean witnessed stock rallies after posting quarterly profits that exceeded analysts’ expectations. Treasury yields eased following the retreat in oil prices.
In global stock markets, performances were varied. The FTSE 100 in Britain climbed 1.6 percent after the Bank of England maintained its main interest rate at 3.75 percent to evaluate the economic repercussions of the Iran conflict. Germany’s DAX rose by 1.4 percent, and France’s CAC 40 increased by 0.5 percent post the European Central Bank’s decision to hold its interest rates steady. Asian stocks, however, experienced mixed results with Hong Kong’s Hang Seng declining by 1.3 percent and the Shanghai Composite index closing 0.1 percent higher.