Canadian fuel costs rise as U.S. attacks continue in Iran

As the war between Iran and the U.S. continues to heat up, prices here at home are rising. Fuel costs are on the rise in Canada as the war and uncertainty drives the price of crude oil to its highest level in more than a month.

The Canadian national average has risen eight cents in the past week to an average of $1.80 per litre. But it could rise even more over the next week — that also means diesel will go up.

“Diesel is the fuel that powers much of the global economy,” says the head of petroleum analysis at GasBuddy.

He says along with fuel prices expected to rise, diesel could surge past its April record of $2.28 a litre in the coming weeks.

“From trucks to tractors and trains, the Canadian economy moves with diesel. And so, the surge in the price of diesel is problematic.”

And when it comes to regular gas, he says because it’s summer, demand will be a factor as well.

“With this happening in mid- to late July, I don’t think we’re going to see a significant drop in demand until after the summer driving season is over.”

The rise comes as disruptions have spread to another major Middle East choke point: the Bab el-Mandeb Strait connecting the Red Sea to the Gulf of Aden.

Yemen’s Iran-backed Houthi rebels said they attacked two Saudi oil tankers in the Red Sea.

Meanwhile, Ukrainian attacks on Russian refineries are also cutting the supply of diesel and jet fuel to global markets.

“We’ve talked about air fares for the summer, that air fares remain elevated — that will likely continue. Jet fuel is similar to that of diesel, and unfortunately it’s jet fuel and diesel that are seeing quite a bit more of an impact, at least for now, compared to gasoline.”

As for the summer driving season demand, experts say prices will remain high for now, but they could drop quite a bit once kids go back to school and people are travelling less.

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