Latest Mideast flare-up driving crude oil, Canadian fuel prices higher

Gasoline prices at the pump are on the rise in many Canadian cities as fears around the U.S.-Israeli attacks on Iran drive up world oil prices.

Price-tracker Gasbuddy.com put the Canadian average at 135.8 cents a litre for regular unleaded gas early Monday afternoon, though there is a lag as it collects data from stations across the U.S. and Canada.

That’s an increase of 1.7 cents from Sunday and 4.2 cents from last week’s average.

In Toronto, the average price was 135.2 cents a litre, up 5.8 cents from Sunday, while Vancouver saw an uptick of 4.1 cents, Montreal saw an increase of 2.3 cents and Calgary saw prices remain steady.

In afternoon trading, the April crude contract was almost US$71 a barrel, an increase of nearly six per cent.

The Canadian Fuels Association, citing data from Kalibrate Canada Inc., said crude oil represents about 41 per cent of the final pump price, with taxes, refining, distribution and marketing making up the rest.

A focus in the current Mideast conflict is the Strait of Hormuz, a key crude oil shipping route at the southern end of the Persian Gulf thorough which 20 per cent of the world’s supply passes.

Monday’s oil price increase was within the US$5-$10 per barrel range expected by analysts based simply on the fear factor associated with the outbreak of war. And some war concerns were already reflected in the price before the conflict started.

However, long-term disruption to ship traffic in the strait could send prices even higher, and so could damage to oil infrastructure in other Gulf countries. Meanwhile, a shorter conflict in which disruptions are easily reversible could mean the current price spike won’t last.

Analysts at S&P Global Energy said the war has the potential to lead to the largest oil supply disruption in history. The firm’s data shows that on Sunday, only five oil tankers moved through the strait compared to 60 per day recently.

During the first two months of this year, almost 21 million barrels of oil and other products a day transited the vital shipping route, which is almost 40 kilometres wide at its narrowest point.

“The duration of the war is critical. If the reduction in tanker traffic continues for a week or so it will be historic,” Jim Burkhard, global head of crude oil research at S&P, said in a report.

“Beyond that it would be epochal for the oil market with prices rising to ration scarce supply and impacts in financial markets.”

This report by The Canadian Press was first published March 2, 2026.

With files from The Associated Press.