As oil prices surge once more, Canadian gas pump costs are also increasing, and the uptick isn’t solely due to the Iran conflict, an analyst reveals. The average price per liter of gasoline in Canada stands at $1.674 as of midday Tuesday, marking a 3.4-cent rise from the previous week’s average, as per data from GasBuddy.com. Patrick De Haan, head of petroleum analysis at GasBuddy, anticipates prices could climb further to around $1.70 on average by day’s end, forecasting that most Canadians may witness hikes of five to 10 cents per liter in the coming days.
The escalation in oil prices is primarily attributed to the U.S.’s conflict with Iran, as tensions heightened following a breakdown in the Middle East ceasefire agreement until last week. Furthermore, Russia’s conflict with Ukraine has also placed pressure on supply in recent weeks. Brent crude oil reached its highest level since June 12, hitting nearly $86 US per barrel early Tuesday, before slightly retreating to slightly above $84 per barrel midday. While these prices exceed those of the past month, when Brent crude traded in the low-$70 US range at times, they remain below the peaks witnessed earlier in the conflict, surpassing $110.
De Haan notes that it typically takes three to five days for gas prices to fully reflect market shocks. Given the volatile and ongoing situation in Iran, predicting the final impact on pump prices is challenging. De Haan warns that if the U.S. and Iran continue their hostilities, price hikes could persist beyond the current week. President Donald Trump has reinstated an Iranian shipping blockade and proposed a 20% fee to safeguard the critical Strait of Hormuz, a key oil shipping route.
In parallel, disruptions to Russia’s oil infrastructure are compounding the situation. Ukraine has intensified attacks on Russian oil refineries and storage facilities in response to Russia’s ongoing conflict. Russia’s refining capacity, in particular, has been significantly affected, impairing the production of lighter oil products. Consequently, the International Energy Agency has slashed its Russian oil production forecast by three percent, while Russia has banned diesel exports to preserve domestic supply.
The impact of Russia’s turmoil is acutely felt in Canada’s Atlantic provinces, where competition with European demand for Russian products is pushing gas prices higher. Regions like the Maritimes, vying with Europe for gasoline availability, are experiencing increased prices. Newfoundland and Labrador lead the regional gas prices at $1.934 per liter, followed closely by Prince Edward Island at $1.883 and Nova Scotia at $1.840, outpacing British Columbia’s gas prices. As prices continue to rise, De Haan advises drivers looking to save money to refuel sooner rather than later.