The ongoing conflict between Iran and the United States is projected to sustain elevated oil prices throughout the rest of the year, impacting gasoline, diesel, and jet fuel costs. A recent report by Deloitte Canada, released on Wednesday, forecasts North American oil prices to average $85 US per barrel in 2026, compared to $67 in 2025. Since the Middle East turmoil started in late February, oil prices have surged by over 50 percent, with West Texas Intermediate (WTI) trading above $116 US per barrel on Tuesday.
However, benchmark prices showed a downward trend on Wednesday morning following news of a two-week ceasefire agreement between the U.S. and Iran. Andrew Botterill, an energy analyst at Deloitte Canada, noted the day-to-day volatility in oil prices but anticipates a decline in the latter half of the year.
Oil prices have remained relatively low in the last two years due to excess production compared to demand. The ongoing conflict in the Middle East has disrupted transit through the Strait of Hormuz, cutting off approximately 20 percent of the world’s oil and natural gas supply to global markets. Botterill emphasized the pressure on energy needs for the year ahead.
Gasoline, diesel, and jet fuel prices are expected to stay elevated in the near term as oil continues to trade above $100 US per barrel. Botterill highlighted the pressure consumers are likely to face in the current system. Prime Minister Mark Carney acknowledged the high gas prices and mentioned that the federal government is exploring ways to alleviate the impact.
Global natural gas prices have risen sharply in recent weeks as countries scramble to secure sufficient supply for heating and power generation. In Canada, natural gas prices have remained stable due to abundant supply and adequate storage levels, according to Botterill, who also noted the country’s significant natural gas exports to the U.S.
Forecasts from various firms, including Calgary-based consultancy Sproule, align with Deloitte’s report, with expectations for WTI to average $84 per barrel in 2026. Despite the global energy crisis, natural gas prices in Canada have not fluctuated significantly, benefiting from ample supply and storage reserves domestically and in the U.S.
