Oil and fuel prices will remain high throughout the year: Deloitte report
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The ongoing war between Iran and the US is expected to keep oil prices high for the rest of the year, including prices for gasoline, diesel and jet fuel.
North American oil prices are projected to average US$85 per barrel in 2026, compared to just $67 per barrel in 2025, according to a new report released Wednesday from Deloitte Canada.
Oil prices have risen more than 50 percent since the conflict in the Middle East began in late February. West Texas Intermediate (WTI), the North American benchmark crude, was trading at more than US$116 a barrel on Tuesday morning.
However, benchmark prices were trending lower on Wednesday morning on news that the US and Iran reached a two-week ceasefire deal.
Andrew Botterill, an energy analyst at Deloitte Canada, said day-to-day oil prices are “highly volatile,” but he expects prices to eventually decline in the “back half of the year.”
Oil prices have remained relatively low over the past two years because more oil was being produced than demand levels.
The conflict in the Middle East is disrupting transit through the Strait of Hormuz, cutting off about 20 percent of the world’s oil and natural gas supply from international buyers.
“There’s going to be a lot of pressure on all of our energy needs this year,” Botterill said in an interview with CBC News.
Gasoline, diesel and jet fuel prices may remain high in the near term as oil continues to trade above US$100 per barrel.
“From a consumer standpoint,” Botterill said, “this is the type of pressure we’re going to see in the system.”
On Tuesday, Prime Minister Mark Carney said the federal government is aware of high gas prices and is “considering ways” to help “mitigate the shock.”
There is no shortage of fuel, but the prices of petrol and diesel are increasing. Queens University Professor Warren Mabee says that till now there has been no increase in the prices of natural gas in Canada.
Deloitte’s latest report is similar to projections from other firms, including Calgary-based consultancy Sproul, which is projecting WTI to average $84 a barrel in 2026.
Global natural gas prices have risen over the past five weeks as many countries struggle to find enough supply to heat homes and fuel power plants.
So far, natural gas prices in Canada have remained unchanged because of abundant supply and adequate storage levels, Botterill said.
“At the end of the day, we’re grateful to export large amounts of natural gas to the United States,” he said. “They have a lot of it too.”
