Despite soaring fuel costs straining households, elevated crude oil prices are proving to be a net positive for Canada, according to a report from TD Economics. The report, released on October 14, 2026, highlights that Canada's role as a major oil producer is helping the country weather global energy shocks caused by conflicts in the Middle East and Ukraine.
TD economist Marc Ercolao noted that higher crude prices boost Canada's economy through stronger exports, incomes, and government revenues. Over the past six months, Canadian energy exports have increased by an average of $4.5 billion per month. While crude oil dominates these exports, diesel has become increasingly important, accounting for 13% of total energy exports and over $2 billion per month in intake.
The report also mentions that the Group of Seven (G7) economies plan to release 100 million barrels of oil and fuel products to global markets, beginning with substantial amounts of diesel. This move is expected to lower the risk of trade-related disruptions to North American diesel and gasoline supplies and potentially reduce prices in central and eastern Canada.
However, Ercolao cautioned that higher diesel and refined fuel costs still reduce household purchasing power and compress margins in sectors that cannot fully pass on the costs. Even if crude oil prices fall, gas and diesel costs may not follow suit immediately due to the slower recovery of refined-product markets.