The ongoing conflict between Iran and the United States is predicted to keep oil prices elevated throughout the rest of the year, impacting gasoline, diesel, and jet fuel costs as well. According to a recent report by Deloitte Canada released on Wednesday, North American oil prices are expected to average $85 US per barrel in 2026, marking a significant increase from the $67 average in 2025.
Since the start of the Middle East crisis in late February, oil prices have surged by over 50%. West Texas Intermediate (WTI), the primary North American crude benchmark, was trading at more than $116 US per barrel on Tuesday morning. However, following news of a two-week ceasefire agreement between the U.S. and Iran, benchmark prices started trending downward on Wednesday morning.
Andrew Botterill, an energy analyst at Deloitte Canada, highlighted the high volatility of day-to-day oil prices but expressed expectations for eventual price declines in the latter part of the year. Over the past two years, oil prices remained relatively low due to excess production compared to demand.
The ongoing conflict in the Middle East has led to disruptions in transit through the crucial Strait of Hormuz, resulting in a blockade of approximately 20% of the world’s oil and natural gas supply to international markets. Botterill emphasized the significant pressure on global energy needs for the current year.
Despite the anticipated decrease, gasoline, diesel, and jet fuel prices are likely to stay elevated in the near term as oil continues to trade above $100 US per barrel. Prime Minister Mark Carney acknowledged the issue of high gas prices and mentioned that the federal government is exploring ways to mitigate the impact on consumers.
Furthermore, global natural gas prices have seen a surge in recent weeks as various nations struggle to secure sufficient supply for heating and power generation. However, Canadian natural gas prices have remained stable due to abundant supply and adequate storage levels, as per Botterill. Canada heavily relies on exporting natural gas to the U.S., a country that also possesses substantial reserves.
The latest report from Deloitte aligns with forecasts from other firms such as Calgary-based consultancy Sproule, which anticipates WTI to average $84 per barrel in 2026. While natural gas prices have soared globally, the Canadian market has not witnessed significant changes due to favorable supply conditions.