The ongoing conflict in the Middle East is projected to significantly impact gas prices in Toronto and the Greater Toronto Area (GTA), with an anticipated increase of seven cents per litre, bringing the price to 173.9 cents/litre. This surge marks a level not witnessed since April 2024, according to Roger McKnight, the chief petroleum analyst at En-Pro.
McKnight outlined that the current dynamics in the global energy market are no longer conforming to the established patterns traditionally followed by oil companies. Typically, fluctuations at the pump would align with changes in wholesale prices after a 24-hour delay. However, this trend seems to have shifted dramatically due to the effects of the ongoing conflict in Iran.
Drivers in Toronto and the GTA have to reach back to April 2024 to recall even higher gas prices, which spiked to 178.9 cents/litre. Several contributing factors underpinned this previous surge: a federal carbon tax increase implemented on April 1, 2024, which added about 3.3 cents per litre nationally, alongside the transition to more costly summer gasoline and ongoing geopolitical tensions in the Middle East.
Fast forward to March 2026, global oil and gas prices have been on a steady incline following missile attacks launched by the United States and Israel against Iran. The situation has escalated, with Iran taking measures to block and attack some oil shipments traversing the Strait of Hormuz. This particular passageway is crucial, as it facilitates the flow of approximately 20 percent of the world’s oil supply.
The uncertainty surrounding the duration of this conflict raises concerns about the stability of gas prices. Even if the conflict were to resolve tomorrow, experts have indicated that gas prices would not revert to pre-conflict levels immediately. Warren Mabee from the Queen's Institute for Energy and Environmental Policy at Queen's University noted that it could take several months for the market to stabilize and for prices to begin to lean towards those prior to the onset of conflict.
Mabee emphasized that despite Canada possessing a solid oil sector, gas prices here are still affected by the global market. In scenarios where supply constraints impact the global stage, such as the current situation, prices can rise rapidly and considerably. Ultimately, participants in the market witness immediate repercussions, leading to elevated prices that can extend beyond the initial conditions once stability is restored.
As the region navigates these geopolitical tensions and their ramifications on the energy market, the immediate future for gas prices appears uncertain, leaving consumers and experts alike bracing for potential fluctuations in the coming months.
