Fuel prices in Saskatchewan have remained remarkably stable in recent weeks, but the situation may not last much longer, according to Patrick De Haan, head of petroleum analysis at GasBuddy.com.
De Haan said the current average price at the pump in Saskatchewan sits around 135.9 cents per litre — almost unchanged from last month and roughly 20 cents lower than this time last year. But global instability, particularly escalating conflict in the Middle East, could soon start nudging prices upward, by perhaps 5 to 10 cents per litre. Rising crude prices would make Canadian producers happy, he noted.
"I think, after being beset by low oil prices the last couple of months, there's certainly some relief, especially for Canadian crude oil," De Haan said. "Just a couple of days ago, (that was) hitting about $65 a barrel.
"It's probably some needed relief for producers, obviously they've been struggling with low oil prices this year as OPEC has ramped up production. So, unfortunately, conflict driving up oil prices is something that may ease some of their pain, at least for now. I don't think this is going to necessarily be a long-term increase in oil prices, but we'll have to wait and see on that."
While De Haan predicted no major spikes, motorists should brace for a modest climb in the coming week or two as stations begin selling through cheaper inventory and restocking at higher wholesale prices. This applies not only to gasoline, but also to diesel, which is already facing lower supply levels.
“Moose Jaw is a little more rural, so it may take a few more days for stations to sell through their cheaper inventory,” he explained. “But I’d be surprised if we didn’t see prices going up.”
The immediate pressure on oil markets stems from military escalation involving Israel and Iran, which triggered sharp but fluctuating price movements in global crude oil benchmarks. On Friday night, oil surged as much as 8 per cent, followed by more modest daily changes. As of this week, West Texas Intermediate crude is back above $73 per barrel.
De Haan also addressed discussions among G7 leaders to tighten the price cap on Russian oil exports, but dismissed any major impact from such policy moves.
“It’s largely symbolic,” he said. “The US can put a price cap, the G7 can try to put a price cap on another country's products, but it's going to be wildly unsuccessful because they as a third party have no ability to require that companies or countries follow their stipulation. ... China and other countries have been ignoring the price caps. At the end of the day, if a country wants to do business with Russia, they’re going to do it.
"The situation in the Middle East right now is probably one of the most significant factors that we're watching for potential impacts."
Looking ahead, De Haan notes that refinery maintenance season is ending, and supply is actually improving across North America, which normally helps stabilize fuel prices during the summer. However, geopolitical volatility remains the wild card.
“Nobody has a crystal ball, including me,” he added. “But if the situation in the Middle East worsens unexpectedly, that could have a shockwave effect on what we pay at the pump.”
For now, consumers can expect minor fluctuations, not major jumps. But keeping an eye on global headlines will be key in the weeks ahead.