The ongoing conflict between Iran and the United States is expected to maintain elevated oil prices for the rest of this year, affecting gasoline, diesel, and jet fuel costs. A recent report by Deloitte Canada predicts that North American oil prices will average $85 US per barrel in 2026, a significant increase from the $67 average in 2025. Since late February, oil prices have surged by more than 50%, with West Texas Intermediate (WTI) trading above $116 US per barrel on Tuesday.
Following news of a two-week ceasefire agreement between the U.S. and Iran, benchmark prices started to trend downward on Wednesday morning. Andrew Botterill, an energy analyst at Deloitte Canada, noted that day-to-day oil prices are highly volatile but anticipates a decline in prices in the latter part of the year.
Over the past two years, oil prices have been relatively low due to excess production compared to demand. However, the conflict in the Middle East, particularly the disruption in the Strait of Hormuz, has hindered the global supply of oil and natural gas, creating pressure on energy needs worldwide. Botterill highlighted the potential strain on energy resources throughout the year.
Gasoline, diesel, and jet fuel prices are likely to remain high as long as oil trades above $100 US per barrel. Botterill emphasized the pressure consumers may experience due to these elevated prices. Prime Minister Mark Carney mentioned that the government is exploring options to alleviate the impact of high gas prices on the public.
Amid the global energy crisis, natural gas prices have surged in various countries, while Canada has maintained stable prices due to sufficient supply and storage levels. Botterill explained that Canada heavily relies on exporting natural gas to the U.S., which also possesses abundant reserves. Projections from different sources, such as Calgary-based consultancy Sproule, align with Deloitte’s report, forecasting WTI to average $84 per barrel in 2026.
As countries grapple with securing enough natural gas for heating and power generation, the global natural gas market faces increased volatility. Despite this, Canada’s natural gas prices have not fluctuated significantly, benefiting from ample supply and storage capacity domestically and in the U.S.