Gas prices spike in Canada after resurgence of U.S.-Iran conflict

The price of oil surged and stocks tumbled, after the U.S.-Iran truce buckled under fresh hostilities. Which begs the question: what will it do to oil prices in Canada in the short-term?

According to gasprices.com, the price of a litre of regular gas rose an average of four cents overnight, but is expected to drop two cents Thursday, to an average of 164.9.

But if U.S. President Donald Trump follows through on his threat to launch more strikes on Iran, Tehran could retaliate by closing the Strait of Hormuz to ship traffic.

Roger McKnight, the chief petroleum analyst with Enpro, says there’s an uncertainty factor being built into the price of gasoline, because no one knows which way it’s going to go.

McKnight says there are no true indicators anymore.

“You can look at the EI inventory reports, you can look at it all you want. But unless that traffic is consistently going through the Strait of Hormuz, you are just going to have confusion on pricing right through to November if not into January,” says McKnight.

He says this is further proof that Canada needs a strategic petroleum reserve. Canada is the only G7 nation that doesn’t have one.

WATCH MORE: U.S.-Iran ceasefire called off after strikes resume. Is there an end to this conflict in sight?