As the growing war in the Middle East keeps pushing the price at GTA gas pumps higher, analysts say it could eventually top $2 a litre.
“Let’s say this goes well into the month of April, anything’s possible with the price trajectory,” said Dan McTeague, former MP and founder of Gas Wizard, a price monitoring and forecasting site.
Since the initial Feb. 28 attack on Iran by the U.S. and Israel, the price of West Texas Intermediate oil has shot to $95.13 (U.S.) a barrel from $67.02, a rise of more than 42 per cent. Brent Crude has risen to $100.16 from $72.48, an increase of 38 per cent.
At gas pumps in the GTA, the average price of filling up your tank has gone from $1.339 a litre to $1.589, according to Gas Wizard data.
Depending upon how long the attacks on Iran last — and Iran keeps blocking the Straight of Hormuz — McTeague said he wouldn’t be shocked if crude rises further, and could even exceed the all-time high of $145 a barrel set in 2008. If that happens, prices at the pumps in Toronto would soar too, he suggested.
“It could hit $2.15 to $2.20 a litre,” said McTeague. “Let’s hope and pray this thing comes to an end quickly.”
That kind of scenario wasn’t in the cards at the beginning of the war, but as the conflict spreads, that has changed, said Patrick De Haan, head of research at Gasbuddy.com.
“Could we potentially see it near the record? Sure,” De Haan said. “I don’t think it’s likely yet, but I also didn’t think we’d be at triple digit levels, and here we are.”
The growing uncertainty over how far the war will spread — and last — make it harder to forecast prices with any precision, De Haan said.
But it looks like the warring nations are digging in for the longer haul.
“We truly don’t know how high it could go. We don’t know how long it will last,” said De Haan. “The market’s in a bit of a crisis mode.”
While U.S. President Donald Trump has suggested releasing some of his country’s strategic oil reserve in an attempt to tamp down prices, De Haan said that’s unlikely to make a substantial difference.
Nor, he argued, was a decision to allow India to buy more Russian oil, despite sanctions imposed on Russia since its invasion of Ukraine.
“Most of these strategic reserves around the world are just lip service. They’re a way for politicians to say ‘how can I make it look like I’m doing something?’ but it doesn’t really make a difference at all,” De Haan said. “Everything that’s been suggested so far is peanuts. There’s nothing that’s been remotely close to making up the difference.”
Iran has threatened to attack any ship in the Straight of Hormuz, which normally handles shipping for 20 per cent of the world’s oil supply, and 30 per cent of the natural gas supply.
