Business

Canadian gas prices to spike as Ukraine conflict prompts oil market chaos

Canadians can expect to pay more at the pump as Russia's attack on Ukraine puts even greater pressure on an already surging oil price environment.

Analyst expects gas prices to jump 5 cents per litre this weekend

Russia's invasion of Ukraine could push up gas prices even further, as pressure builds on an already surging oil price environment. (Matthew Howard/CBC)

Canadians can expect to pay more at the pump as Russia's attack on Ukraine puts even greater pressure on an already surging oil price environment.

Roger McKnight, chief petroleum analyst at En-Pro International Inc., expects gas prices across the country to rise  approximately five cents per litre this weekend.

"If you are only filling up once a week or that sort of thing, get anything in your tank that you can before Saturday," McKnight said Thursday. "But if you're a daily filler, there's really not much you can do."

The high demand for oil combined with a shortage of supply has been pushing oil prices — and consequently gas prices — up for weeks.

The benchmark West Texas Intermediate price sat at $92 US per barrel Thursday afternoon after briefly trading above $100 US per barrel earlier in the day. Brent crude fell to $99 US a barrel, after topping $105 US a barrel for the first time since 2014 on Thursday morning.

Roger McKnight, chief petroleum analyst for En-Pro International, encourages people to fill up their tanks now before prices rise. (CBC)

Even if U.S. President Joe Biden attempts to intervene to calm the pressure on oil prices, the situation could still worsen, according to McKnight.

"OPEC+ is really Saudi Arabia and Russia together, and if President Biden puts pressure on Saudi Arabia to get more crude into the system to lower prices, that's just going to upset Russia even further and they may even shut down supply completely," McKnight said.

The ability for OPEC+ to respond in any meaningful way is limited anyway because of the oil cartel's struggle to keep up with its committed production increases, said Rory Johnston, founder of energy price newsletter Commodity Context.

There is still much uncertainty around how tensions between Russia and Ukraine will play out and if there will ultimately be a loss of oil supply. If the crisis in eastern Europe does worsen, Johnston said the current deficit in the oil market could double, sending prices through the roof.

"I think you could absolutely see prices add $20, $30, $40 a barrel," he said.

Meanwhile, Canada on Thursday announced more sanctions on Russia, including the halting of all export permits, as well as financial penalties targeting banks, lawmakers and elites, despite Russia promising to retaliate against those who interfere with its operations in Ukraine.

Add some “good” to your morning and evening.

A variety of newsletters you'll love, delivered straight to you.

Sign up now

Comments

To encourage thoughtful and respectful conversations, first and last names will appear with each submission to CBC/Radio-Canada's online communities (except in children and youth-oriented communities). Pseudonyms will no longer be permitted.

By submitting a comment, you accept that CBC has the right to reproduce and publish that comment in whole or in part, in any manner CBC chooses. Please note that CBC does not endorse the opinions expressed in comments. Comments on this story are moderated according to our Submission Guidelines. Comments are welcome while open. We reserve the right to close comments at any time.

Become a CBC Member

Join the conversation  Create account

Already have an account?

now