As oil prices surge once more, Canadian gas prices are following suit, with an increase not solely attributed to the Iran conflict, as per an expert. The average cost of a liter of gasoline in Canada stands at $1.674 as of midday Tuesday, climbing by 3.4 cents from the previous week’s average, according to data from GasBuddy.com. Patrick De Haan, the head of petroleum analysis at GasBuddy, anticipates prices could further escalate to around $1.70 on average by day’s end, with most Canadians likely experiencing an uptick of five to 10 cents per liter in the upcoming days.
The primary driver behind these price hikes is the escalation in oil prices due to the U.S.-Iran conflict, which has intensified following a breakdown in the Middle East ceasefire agreement, along with disruptions caused by Russia’s conflict with Ukraine in recent weeks. Brent crude, a benchmark, surged to its highest level since before the U.S. and Iran ceased hostilities, reaching about $86 US per barrel early Tuesday, before slightly dropping to slightly above $84 per barrel midday.
De Haan notes that it typically takes three to five days for gas prices to fully reflect such market shocks. However, given the volatile situation in Iran, predicting the final outcome for pump prices remains challenging. Should the U.S. and Iran continue their confrontations, De Haan suggests that price increases may persist beyond the current week.
Simultaneously, Russia’s oil infrastructure is also under pressure. Recent strikes by Ukraine on Russian oil refineries and storage facilities have severely impacted Russia’s refining capacity, affecting its ability to process oil into lighter products like fuels. Consequently, the International Energy Agency has revised down its forecast for Russia’s oil production this year by three percent. Russia has even banned diesel exports to preserve supply domestically.
De Haan points out that the repercussions of these events are particularly felt in the Atlantic provinces of Canada, where heightened demand from Europe due to reduced Russian supplies is leading to increased prices. Regions like Newfoundland and Labrador, Prince Edward Island, and Nova Scotia are experiencing higher gas prices compared to British Columbia, which had previously faced high prices due to the Iran conflict.
With prices already on the rise, De Haan advises drivers looking to save money to consider refueling sooner rather than later.