The ongoing conflict between Iran and the United States is projected to maintain elevated oil prices for the rest of this year, impacting gasoline, diesel, and jet fuel costs. Anticipated data suggests that North American oil prices could average $85 US per barrel in 2026, a notable increase from the $67 average in 2025, according to a recent report by Deloitte Canada released on Wednesday.
Since the commencement of the Middle East crisis in late February, oil prices have surged by over 50%, with West Texas Intermediate (WTI), the primary North American crude benchmark, trading above $116 US per barrel on a recent Tuesday morning. However, benchmark prices showed a downward trend on Wednesday morning following reports of a two-week ceasefire agreement between the U.S. and Iran.
Andrew Botterill, an energy analyst at Deloitte Canada, highlighted the significant volatility in day-to-day oil prices but expressed expectations for a decline in prices during the latter part of this year. The conflict’s impact on the oil market is further exacerbated by a reduction in transit through the Strait of Hormuz, resulting in a 20% cut-off in global oil and natural gas supply to international markets.
Botterill noted the mounting pressure on energy demands due to these circumstances, emphasizing that high gasoline, diesel, and jet fuel prices are likely to persist as long as oil maintains trading levels above $100 US per barrel. Prime Minister Mark Carney acknowledged the challenges posed by high gas prices and indicated that the government is exploring potential measures to mitigate the economic impact on consumers.
In alignment with other industry forecasts, Deloitte’s report aligns with projections from firms like Sproule, based in Calgary, which foresees WTI averaging $84 per barrel in 2026. Global natural gas prices have witnessed a surge in recent weeks as various countries struggle to secure ample supply for domestic heating and power generation needs. Despite this trend, natural gas prices in Canada have remained stable due to sufficient supply and adequate storage capacities.
Botterill highlighted the interconnectedness of natural gas markets between Canada and the U.S., emphasizing that the abundance of natural gas in both countries has helped stabilize prices within the Canadian market.
