Toronto drivers welcomed a 13-cent drop in gas prices Friday morning, but one energy analyst says it will likely take months before the pain at the pumps brought on by the war in Iran subsides.
“You’re looking at probably June before this thing all settles down. That’s in a perfect world, and believe me, this is not a perfect world,” Roger McKnight, chief petroleum analyst at En-Pro International Inc. told CTV News Channel on Friday.
McKnight explained that the overnight drop was a result of a 14-day ceasefire announced between the U.S. and Iran on Tuesday, which included reopening the Strait of Hormuz, a narrow waterway in the Middle East that was used to ship 20 per cent of the world’s oil before the joint U.S.-Israel military operation in Iran began in late February.
The ceasefire itself has been described by Vice-President JD Vance, who will lead the American negotiating team in talks in Pakistan, as “fragile.” A day after the ceasefire was announced, Iran closed the strait in response to Israeli attacks on Lebanon.
Since the ceasefire was reached, only 12 ships have passed through the strait. Before the war started, over 100 ships passed through daily.
Meanwhile, the price of Brent crude, the international standard for the price of oil, was up to US$97 on Friday, marking a 30 per cent increase from the start of the war.
Gas prices to drop another 1 cent Saturday, diesel prices going up
If a deal to end the war can be reached, McKnight said it would still likely take time for global oil prices to stabilize.
“Because the damage in the Persian Gulf to the refining system has been extensive, and it’ll take that long just to just to repair the damage. Also, if a tanker was loaded up today, it would take 30 days to reach its customers, and it’ll take 30 days to come back again to reload,” he said.
Gas prices in Toronto are likely to drop another one cent overnight, McKnight said, but added that diesel prices will be going up by four cents. Even those who don’t drive will feel that increase, as it’s the primary fuel type used by long-haul trucks to transport food.
“Gasoline gets all the headlines, and it’s sort of the fancy racehorse in this whole game, but it’s diesel that really drives the economy,” he said. “You can always cut back on your gasoline by not driving as much, but you can’t cut back on your eating, which is where all the food comes from and it gets there by diesel.”
