Drivers could soon be paying more at the pump as renewed tensions between the United States and Iran send global oil prices higher.
The price of Brent crude oil climbed more than five per cent Wednesday, nearing 79 dollars a barrel, after U.S. President Donald Trump declared the temporary agreement with Iran.
The U.S. launched strikes on several places in Iran and reinstated sanctions on its oil sales. Trump stated the strikes are continued retaliation for attacks on commercial vessels in the Strait of Hormuz.
Roger McKnight, Chief Petroleum Analyst with En-Pro International, says this is just the start and gas prices will likely jump another six to seven cents a litre on Friday.
He says there’s too much instability at the moment.
“Nobody seems to know what’s going on. I think the investors, the shippers, insurers of crude are all saying ‘we don’t know what’s going on, so let’s raise the price because we have no guarantee that any product we try to get out of the Strait of Hormuz is going to get to its destination’.”
McKnight says the uncertainty surrounding the conflict is driving fuel prices more than anything else.
“There’s a war factor in the price of gasoline and diesel, and now there’s an uncertainty factor that’s really driving the price because we don’t know which way President Trump is going to go this time or what the Iranians’ response will be to anything that he says. So I think we’re going to we’re going to see the uncertainty and the bouncing up and down go right through to January of 2027.”
He says another concern is the world’s shrinking emergency oil supplies, which he believes could keep prices high.
“They are really at rock bottom. Everybody’s been drawing out of the Strategic Petroleum Reserves or whatever they want to call it on a global basis. But surprise, surprise, that has to be replaced. Anytime you drop crude out of the Strategic Petroleum Reserve in the U.S., that’s not free.”
The Strait of Hormuz is one of the world’s most important oil shipping routes.
McKnight says while fuel prices may continue to fluctuate in the coming months, motorists shouldn’t expect sustained relief at the pumps anytime soon.
-with files from AM800’s The Shift with guest host Kyle Horner