Gas prices in the GTA could drop by 11 cents to 175.9 cents/litre by Friday, but how long prices continue to fall is likely tied to the ceasefire between the U.S. and Iran.
The two-week ceasefire was subject to Iran reopening the Strait of Hormuz, where a fifth of the world’s oil is transported during peacetime.
Iran originally reopened the strait, but closed the waterway on Wednesday in response to Israeli attacks against the Hezbollah militant group in Lebanon
Oil prices have been swinging through sharp and sudden reversals for weeks, with hopes rising and falling for the Strait of Hormuz to fully reopen and allow production of oil and natural gas to kick back into gear. Brent oil has gone from roughly $70 per barrel before the war in late February to more than $119 at times.
Roger McKnight, chief petroleum analyst with En-Pro, says the ceasefire crashed crude prices by $18 a barrel, which was the impetus for the decrease in the price of gasoline.
“How low and how long the lower prices will go will depend on the strength of the ceasefire agreement. If the agreement becomes just another disagreement, then prices will bounce back up again and rapidly,” said McKnight.
He added that he has little to no confidence that this war will pause for any appreciable period of time, so the low prices likely won’t last long.
Friday’s price drop would be the second in as many days following a two-cent decrease on Thursday.
The price of gas has jumped by over 50 cents in the GTA since the United States and Israel launched missile attacks against Iran on Feb. 28.
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With files from the Associated Press