The release of gas prices may be temporary following new strikes in Iran – National
Gasoline prices in Canada are expected to start rising again as any progress made on the peace deal between the US and Iran appears to be unsuccessful.
Consumers should expect to “dig a little deeper” into their wallets, according to gas price experts.
“The slap in the face to start the work week is that a trade deal is now off the table, and we're back. Ground zero is starting everywhere, and the US is no closer to a peace deal than it was a week and a half ago,” said petroleum analyst Patrick De Haan at GasBuddy.
Global oil markets have been rising since shipping was almost halted in the Strait of Hormuz when the conflict began at the end of February.
Consumer fuel prices have seen some relief in the past few weeks as a peace deal was reportedly being discussed, raising hopes that oil exports could start flowing again in the crisis and provide some relief.
But that price relief may be temporary.
“If there is no agreement, we are probably getting worse every day that this is going on compared to where we were a week and a half ago, when it seemed like an agreement was close to us,” De Haan said.
“So for motorists, they will have to hold on tight again this week.”
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On May 29, US President Donald Trump said in a social media post that the US blockade of the Strait of Hormuz “will be lifted now,” based on Iran agreeing to the terms of the peace agreement.
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The CAA says the national average for regular grade gasoline currently sits at around CAD$1.69 per liter as of publication. That's down from $1.81 a week earlier, and $1.90 on May 6.
But on Monday, the US said it had struck several targets in Tehran, and Iran responded with targeted strikes in the region, where Kuwait reported incoming fire.
Iran's state television later shared images of the launch of the ballistic missiles, including a close-up photo showing a sticker on its body depicting the wounded United States President Donald Trump covered in “closed” Strait of Hormuz with the caption: “Until the last American soldier leaves the region.”
Oil prices have been rising as a result.
As of press time, US crude oil, known as West Texas Intermediate (WTI), was trading above US$94 per barrel, up nearly nine percent from a low of $86 on May 29.
“The price of oil has fallen significantly in the past few weeks based on US President Trump saying that a deal may be close and close,” said De Haan.
“However over the weekend Iran decided to leave highlighting the new Israeli attack on Lebanon and oil prices returned to where they were before all the hopes and dreams for the US-Iran deal.”
Higher crude oil prices are likely to result in more expensive fuel for consumers.
So how much should Canadians expect to pay?
De Haan says Canadians should expect gas prices to rise between five and 15 cents a liter in the coming days and weeks, depending on the location. He added that diesel prices may be slow to respond to these recent changes.
Over time, De Haan says frustration is mounting among consumers and global markets alike, not only with the country's tensions, but with the uncertainty of when — if at all — tensions will ease.
“This guy who cried wolf, the president who announced the deal and three times this has happened now, we haven't seen anything,” he said.
“That may come back to worry the president, especially in the coming months, as many in the Republican party, his party, are increasingly worried about the prospects of the midterm elections and the high price of electricity that could reach record levels this summer.”
-via file from the Associated Press
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