U.S. crude oil prices climbed above $90 per barrel on Friday, marking the first time in over two years. This represents a sharp increase from just under $73 a week earlier, triggered by the escalating conflict involving the U.S., Israel, Iran, and its proxies.
Strait of Hormuz Disruption Halts Tanker Traffic
The expanding war has raised fears of Iranian drone or missile strikes, effectively halting nearly all tanker traffic through the Strait of Hormuz. This vital waterway, bordered by Iran to the north, serves as the sole sea exit from the Persian Gulf and handles 20% of global oil demand. Tankers navigating the strait transport oil and gas from key producers including Saudi Arabia, Kuwait, Iraq, Qatar, Bahrain, the United Arab Emirates, and Iran itself.
U.S. Energy Secretary’s Outlook
U.S. Energy Secretary Chris Wright stated that the price spike should persist for weeks rather than months. He added, “Iran has been an escalator of energy prices for 47 years, the whole history of their regime. We’ve got a little bit of an interruption right now, to finally put an end to their ability to wreak havoc, to kill Americans, and to terrorize their neighbors.”
Rising Gas Prices Across North America
In the U.S., average gas prices jumped 34 cents per gallon over the past week, reaching $3.32, equivalent to about 120 cents per litre. Canadian gas prices followed suit, climbing to 135.3 cents per litre after initial airstrikes last weekend, up from 128.8 cents a month prior. Tracking site Gas Wizard forecasts prices could hit nearly 153 cents per litre by Saturday.
