While the war in Iran has sent gasoline prices soaring all over the world, there are growing concerns about how the spike in the associated fee of other fuels could also affect consumers and the broader economy.
In Canada, the typical price of diesel has surged to almost $2.30 per litre — greater than 50 per cent higher than simply three months ago.
While diesel was selling for about $1.90 per litre in Calgary on Wednesday, it has soared to well over $2. per litre in another parts of Canada recently.
Global News
“It’s unprecedented. We’ve never seen anything like this within the oil market or the refined products market and it’s getting worse,” said Calgary-based petroleum industry analyst Richard Masson.
“The tankers that left 4 weeks ago just before the war began are only beginning to unload at their destinations,” he continued.
About 13 million barrels of oil per day normally move through the Strait of Hormuz on the mouth of the Persian Gulf — considered one of the busiest and most strategically significant shipping routes on the earth and a key oil choke point — about 25 per cent of world oil shipments.
The closure has disrupted oil and gas shipments from the region and rattled markets all over the world.
“It takes three to 4 weeks to get where they’re going, but over the past 4 weeks there have been no tankers leaving out of the Strait of Hormuz.
“So over the following few weeks, places that need those fuels aren’t going to be getting them.”
While the soaring price of gas has put a dent in drivers’ pocketbooks, a spike in the associated fee of diesel, which the transportation industry relies on, threatens to do much more damage.
Global News
Masson said the refined products market is experiencing prices like $200 a barrel for diesel fuel.
“And greater than that, countries like China have banned exports of refined products. So there are places like California, that rely upon refined products coming from China because they’ve had many refineries shut down, who at the moment are scrambling to search out replacements for his or her diesel, for his or her gasoline.
Get weekly money news
Get expert insights, Q&A on markets, housing, inflation, and private finance information delivered to you each Saturday.
“The entire global market at once is completely upset, and individuals are still trying to know what all of it means.”
Small business owners in Alberta are also waiting to see what happens, depending on how long the war drags on.
“Well, the worth goes to affect freight and delivery, of course,” said Ernie Tsu of the Alberta Hospitality Association, who can also be owner of the Trolley 5 Brewpub in Calgary.
“We haven’t seen it come down yet from the key suppliers. I’m sure it’s going to,” said Tsu, who admits restaurant menu prices might want to increase if freight and delivery charges increase.
Nonetheless, Tsu said lots of restaurants are working with local farmers in an effort to maintain transportation costs down and still provide excellent products and that helps “massively.”
Petroleum industry analyst Richard Masson says, if diesel prices increase an excessive amount of, we could see a whole breakdown in the provision chain, much like what happened in the course of the COVID pandemic.
Global News
Masson said if diesel prices get too high, it could cause your entire supply chain to interrupt down.
“There’s two parts to that. One is the worth gets higher for transportation due to diesel cost and in order that gets transmitted through to prices,” said Masson.
“The opposite is people just can’t pay money for the product physically and in order that they stop shipping things and so the provision chains start to interrupt down.
“I’m seeing increasingly more discuss supply chains breaking down like happened during COVID.”
While the members of the International Energy Agency recently agreed to release lots of of hundreds of thousands of oil from their strategic emergency reserves in an effort to combat a possible shortage of Middle East oil, Masson said it could not help prevent a shortage of diesel, since it’s not the appropriate form of oil.
Calgary-based Petroleum industry analyst, Richard Masson, said the oil that’s shipped out of Middle East is more suitable for making diesel than the sunshine crude produced in lots of other parts of the world.
REUTERS/Hamad I Mohammed/File Photo
“The Middle East produces form of a medium-sour crude, and that crude goes into refineries and makes a bigger proportion of diesel and a smaller proportion of gasoline.
“When that crude goes missing, it affects the diesel supply more and that is the challenge because not all crude oil is similar.”
While much of the oil produced in Canada is suitable for making diesel, Masson said many of the recent increase in U.S. production is lighter oil obtained through fracking, and shouldn’t be suitable for making diesel.
“We have now this real problem where not only is there a smaller supply of crude, however it’s not the appropriate sorts of crude in the appropriate refineries to maintain production of things like diesel going at the speed we’d like — and naturally, the economy depends upon diesel,” said Masson.
“So we we have now to search out a approach to adjust our consumption and the best way we try this is by price. So the upper the worth goes, more people will stop using it and only the very best uses will occur.
“That is what’s going to occur over the approaching weeks as this (crisis) deepens.”
© 2026 Global News, a division of Corus Entertainment Inc.