Middle East Tensions Send Canadian Gas Prices Soaring
Fuel prices in Canada are on the rise again as tensions escalate in the Middle East. According to Patrick De Haan, head of petroleum analysis at Gasbuddy.com, drivers should expect no relief from high gas prices this time around.
Traditionally, gas prices decline after Labour Day as gasoline demand tapers off and winter gasoline becomes cheaper, but De Haan says that might not happen this year.
The crude price spike in February when the US and Israel launched their war against Iran caused tanker shipments to cease through the Strait of Hormuz, a vital link between the Persian Gulf and the open ocean. Although prices retreated to pre-war levels by early summer amid hopes for peace, the situation has since deteriorated.
The current Brent crude price is hovering around $100 USD, which is a major psychological milestone for markets, according to Lukman Otunuga, market research head at FXTM.
Ukrainian attacks on Russian refineries have further squeezed the market, and De Haan predicts that Canadian motorists will soon see higher prices. The national average for a litre of regular unleaded gasoline is already at $1.80, with a possible jump to $1.82-$1.85 in the next week or two.
Diesel prices could also climb an additional 5-10 cents per liter, which will filter through to consumers and affect farmers who need diesel for their machinery.