A new quarterly forecast from Deloitte Canada, released April 8, 2026, warns that global energy markets remain in a state of high friction. While prices may retreat from their recent peaks later this year, the firm expects oil and fuel costs to remain significantly higher than 2025 averages due to ongoing conflict in the Middle East.
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The report highlights that the conflict involving the U.S., Israel, and Iran has completely reshaped the 2026 outlook.
- Price Surge: WTI crude spiked to $115 USD per barrel following the escalation in February, a 70% increase from pre-conflict levels.
- The 2026 Average: Deloitte projects WTI will average $85 USD per barrel for the full year. While this is lower than current spot prices, it is a sharp jump from the $67 USD average seen in 2025.
- Future Outlook: Futures markets suggest a cooling trend toward the end of the year, with prices potentially dipping toward $76 USD by 2027 if tensions stabilize.
2. Supply Chain Disruptions
The primary driver of the price surge is the restricted movement through the Strait of Hormuz.
- The Bottleneck: Hostilities have choked off approximately 20% of the world’s supply of oil and Liquefied Natural Gas (LNG).
- LNG Impact: While Canadian natural gas prices have stayed relatively low ($2.15 per mmBTU) due to a mild winter, the global shortage has increased competition for supply in Europe and Asia.
3. Impact on Mergers & Acquisitions (M&A)
The high price of oil has ironically stalled deal-making in Canada’s oilpatch.
- The “Price Gap”: According to Deloitte partner Andrew Botterill, it is currently difficult for buyers and sellers to agree on valuations when prices are hovering near $115 USD.
- The Opportunity: If prices stabilize near the $80 mark later this year, Deloitte expects a surge in M&A activity, particularly in the Montney and Duvernay regions of Alberta and B.C.
4. Summary for Consumers
For the average consumer, the “stickiness” of these prices means:
- Fuel Costs: Gasoline and diesel prices are unlikely to return to 2025 levels anytime soon, as the refined product market remains tight.
- Inflationary Pressure: High energy costs continue to act as a headwind for the broader economy, contributing to sustained inflation across transportation and manufacturing sectors.
Expert Perspective: “The market is currently pricing in a lot of fear,” says Botterill. “Until we see a clear path to de-escalation in the Middle East, the ‘energy floor’ for 2026 will remain uncomfortably high for most businesses and households.”
