Listen to this article
Estimated 3 minutes
The audio version of this article is generated by AI-based technology. Mispronunciations can occur. We are working with our partners to continually review and improve the results.
The ongoing war between Iran and the U.S. is expected to keep oil prices high for the remainder of the year, including gasoline, diesel and jet fuel prices too.
North American oil prices are anticipated to average $85 US per barrel in 2026, according to a new report released Wednesday from Deloitte Canada, compared to averaging just $67 in 2025.
Oil prices have surged by more than 50 per cent since the conflict in the Middle East began in late February. West Texas Intermediate (WTI), the North American benchmark crude, was trading for more than $116 US per barrel on Tuesday morning.
However, benchmark prices were trending downward Wednesday morning on news that the U.S. and Iran have reached a two-week ceasefire agreement.
The day-to-day oil prices are “highly volatile,” said Andrew Botterill, an energy analyst at Deloitte Canada, but he expects prices to eventually decline in the “back half of the year.”
Oil prices have been relatively low over the last two years as more oil was being produced compared to the level of demand.
The conflict in the Middle East continues to choke transit through the Strait of Hormuz, cutting off roughly 20 per cent of the world’s oil and natural gas supply from international buyers.
“There is going to be a lot of pressure on all of our energy needs for this year,” said Botterill, in an interview with CBC News.
Gasoline, diesel and jet fuel prices could continue to remain high in the near future as oil continues to trade above $100 US per barrel.
“From a consumer standpoint,” said Botterill, “that is the kind of pressure that we’re going to see in the system.”
On Tuesday, Prime Minister Mark Carney said the federal government is aware of high gas prices and is “looking at” ways to help “cushion the blow.”
No fuel shortages, but gasoline and diesel prices are rising. So far, natural gas prices haven’t budged in Canada, explains Warren Mabee, a professor at Queen’s University.
The latest report from Deloitte is similar to projections from other firms, including Calgary-based consultancy Sproule, which is anticipating WTI to average $84 per barrel in 2026.
Global natural gas prices have spiked over the last five weeks as several countries are scrambling to find enough supply to heat homes and fuel power plants.
So far, natural gas prices in Canada have remained unchanged because there is plenty of supply and adequate storage levels, said Botterill.
“At the end of the day, we’re beholden to exporting a lot of natural gas into the U.S.,” he said. “They also have a lot of it as well.”
Discussion about this post