TORONTO – Gas prices are bouncing up and down this week as the outlook for the conflict in the Middle East continues to change quickly.
The Canadian average stood at about $1.73 a litre Thursday morning according to GasBuddy, up about three cents from Wednesday and nearing the peak of the past month of about $1.74 per litre reached on Tuesday.
It’s hard to say where prices could go from here, said Patrick De Haan, head of petroleum analysis at GasBuddy.
“I’ve tried to stop predicting,” he said.
“You know, I filled up my tank Sunday night after President Trump was launching some fiery rhetoric on attacking Iran’s power plants, and then the next morning he woke up and decided that he was going to stop doing that for five days.”
Prices have fluctuated after Trump walked back the threat and pushed a peace plan, then prices rose after Iran rejected it.
On Thursday, Trump warned Iran to “get serious soon” on negotiating a deal to end the war as thousands of U.S. troops headed to the region.
“The pendulum’s all over the map,” said De Haan. “It has nothing to do with market fundamentals, so much as it does the situation with the U.S. and Iran and what the future of that may look like.”
While crude oil prices were climbing again Thursday, prices at the pump should actually go down about five cents on Friday, said Roger McKnight, chief petroleum analyst at En-Pro International Inc.
There’s no clarity on what could happen further out though, he said.
“It’s pretty difficult to come up with a solid forecast when it’s jumping around all over the place like that.”
The companies behind gas stations have added to the unpredictability by changing their approach, adding three cents to their retail margin, said McKnight.
“I think they’re taking advantage of the crisis, as you want to call it, so that’s kind of been a significant screw up in the calculations, if you pardon the language.”
The price increases aren’t coming from any shortages in North America, which is fairly insulated from the direct impacts of shipping disruptions through the Strait of Hormuz. McKnight noted that U.S. crude inventories actually went up by seven million barrels last week.
Instead it’s based on speculation of what could be ahead for crude more generally, he said.
“The oil traders and the Wall Street people are playing a guessing game, which is called the futures.”
The physical buffer has helped keep gas prices in North America still well off record highs of about $2.10 per litre reached in June 2022, around the start of Russia’s invasion of Ukraine.
Where there is a more direct effect has been on diesel prices, which are skirting record levels.
De Haan noted that prices were around $2.22 a litre Thursday, close to the all-time high of $2.25 a litre.
It comes after a cold winter that saw higher demand for heating fuel, which effects diesel prices. Lower production volumes of diesel in North America compared with gasoline also make it more sensitive to disruptions.
The other factor driving up diesel prices, said McKnight, is that diesel is the fuel of choice in Europe, where physical supplies have been much more severely disrupted by the Middle East conflict.
“When there’s a severe shortage like that, the export opportunities for diesel from the United States and North America is financially much more attractive to export it than it is to keep it at home, so diesel is being exported and driving up the price at home.”
High diesel prices come as farmers are getting ready to plant crops and are also facing severe disruptions in the fertilizer market, which could help lead to higher food prices and other knock-on effects as the conflict drags on.
The severity of the disruption is becoming very close, if not exceeding the Arab oil embargo back in the ‘70s, said De Haan.
“It’s hard to add it all up because there’s so many things happening at once.”
This report by The Canadian Press was first published March 26, 2026.
