After weeks of rising costs at the pump, Canadians finally saw a small break on Friday. But experts caution that any relief may be short-lived, as global conflict continues to cast uncertainty over fuel prices.
According to CAA, the national average price for gasoline fell to $1.78 per litre on Friday, down from $1.81 the day before. GasBuddy reported a similar trend, placing the average at $1.80 per litre—a two-cent drop from Thursday.
Despite this modest decline, prices remain significantly higher than both last year and even just a month ago. At this time in 2025, Canadians were paying around $1.29 per litre, while prices sat at $1.53 only a month ago.
What’s driving the drop?
The recent decrease can be traced back to sudden movements in global oil markets tied to geopolitical developments.
Patrick De Haan, head of petroleum analysis at GasBuddy, explained that the drop follows a sharp decline in oil prices earlier in the week.
“The drop in prices that we’re seeing right now has to do with the big drop that we saw on Wednesday and the price of oil after a ceasefire was announced and Iran had said it would reopen the Strait of Hormuz,” De Haan said.
On Wednesday morning, the price of Brent crude—an international benchmark—fell dramatically from about $110 per barrel to roughly $92. According to De Haan, that 15 per cent drop is now beginning to filter through to gas prices in both Canada and the United States.
“That 15 per cent drop in the price of oil is now translating to a fall in gas prices across much of Canada,” he said.
In some areas, the impact has already been noticeable. Certain gas stations in Toronto saw prices fall by as much as four cents per litre.
Why the relief may not last
While prices are trending downward, experts warn that the situation remains highly volatile.
“With a war as unpredictable as this one, there’s no way to know where gas prices are heading,” said Clay Jarvis, financial expert at NerdWallet Canada. “Even if prices slide over the next several days, it would only take a few bombs aimed at Iranian or Kuwaiti oil infrastructure to send them back up.”
Complicating matters further, tensions in the region remain unresolved. On Wednesday, just a day after the ceasefire announcement, Iran closed the Strait of Hormuz in response to Israel’s attacks against Lebanon.
Even if the critical shipping route reopens, the effects won’t be immediate.
“There’s still a massive backlog of ships that need to get through the Strait of Hormuz before global oil supply, and oil prices, stabilize,” Jarvis added.
A critical weekend ahead
Short-term relief may continue through the weekend, but what happens next could hinge on high-stakes diplomacy happening halfway around the world.
Delegations from the United States and Iran are set to meet in Islamabad, Pakistan, on Saturday in an effort to negotiate an end to the conflict.
“We may see a slight dip in prices (over the weekend). But before I say the coast is clear, the U.S. and Iran are holding talks on the ceasefire this weekend in Pakistan,” De Haan said. “What develops there could be influential in directing oil prices up or down early next week.”
Depending on the outcome, Canadian gas prices could swing dramatically, anywhere from $1.50 to $2.50 per litre.
Diesel hits a record high
While gasoline prices have dipped slightly, diesel costs are moving in the opposite direction.
GasBuddy reports that diesel prices have reached a record high of $2.27 per litre nationwide, surpassing the previous peak of $2.25 set on June 19, 2022.
This spike could have widespread economic impacts.
Higher diesel prices often lead to increased costs for transporting goods, which can ripple through the economy and raise prices on everyday items.
“Groceries or anything that travels via a plane or a train or a truck” could become more expensive, De Haan noted.
Air travel may also become pricier. With refineries in countries like India and China slowing production due to oil shortages, jet fuel availability has tightened significantly.
“Jet fuel prices have been white-hot in recent weeks. That could lead to a continued rise in airline airfares,” De Haan said.
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