The value of Brent crude oil swiftly surpassed $126 per barrel recently, reaching its peak since March 2022. The surge was driven by concerns over the reopening of the Strait of Hormuz and the ongoing Middle East conflict, following stalled negotiations between the U.S. and Iran. Brent crude for June delivery has now decreased to approximately $111 per barrel, down from the recent high.
Simultaneously, gasoline prices are on the rise, with the average price per liter in Canada hitting $1.830, showing a 4.5-cent increase from the previous day and a significant jump of 47.9 cents compared to a year ago. British Columbia recorded the highest gas prices, averaging just over $2 per liter.
Forecasts indicate a further increase in prices. Predictions for the Greater Toronto Area suggest prices could climb to $1.899 per liter, while Halifax and Edmonton may see prices at $1.897 and $1.859 per liter, respectively.
In the United States, the average gas price stands at around $4.375 per gallon. The uncertainty surrounding the conflict in the Middle East, particularly the situation with Iran and the Strait of Hormuz, is a key driver of the oil price hikes. Reports hinting at a potential escalation by U.S. President Donald Trump have dimmed hopes for a swift resolution to the conflict.
According to ING Bank analysts Warren Patterson and Ewa Manthey, the breakdown in U.S.-Iran talks and the rejection of Iran’s proposal by President Trump have dampened market expectations for a quick resumption of oil flows.
Traders are actively engaging in buying and selling various oil contracts for future delivery. In the Brent crude market, the price for July delivery surged to $114.70 per barrel before settling at $110.40. Despite remaining relatively stable compared to the previous day, the prices are still elevated from pre-conflict levels.
The ongoing flood of positive profit reports from U.S. companies, alongside the slight easing in oil prices, has helped maintain stability in Wall Street, with stock markets in North America witnessing gains. Major indices, including the S&P 500, the Dow, and the Nasdaq composite, all posted notable increases.
Meanwhile, global stock markets displayed mixed performances. The FTSE 100 in the U.K. rose by 1.6%, while Germany’s DAX and France’s CAC 40 also saw gains after the Bank of England and the European Central Bank decided to maintain their interest rates amid the uncertainties posed by the Iran conflict. Asian markets, however, experienced varied trends, with Hong Kong’s Hang Seng declining by 1.3% and the Shanghai Composite index showing a slight increase.
