04/06/2026
The Economic Impact of the U.S.-Iran Conflict on Oil Prices
Even with recent ceasefire talks, Brent crude oil is still at US$108.60 a barrel—that's 50% higher than before the war. Economists are saying that if oil prices keep going up, it could really hurt the economy across North America.
Key Economic Warnings
The US$150 Threshold: A BMO report says if oil hits US$150 a barrel, gas prices in the U.S. could go over US$6 a gallon. That would mean people spend 2% less, and we might even see a mild recession.
Central Bank Paralysis: The Bank of Canada and the U.S. Federal Reserve would have a tough time fixing this. Unlike normal economic downturns, this energy-driven shock would make inflation shoot up, making it hard for the banks to do much.
Worse Than 2022: This crisis is the biggest monthly jump in fuel prices in 40 years and could be way worse than the oil shock from the Russia-Ukraine war.
Canada Gets Hit Harder: Canadians will probably feel this more than Americans. Since Canadians are generally not as financially stable, this shock will make them cut back on extra spending even more.
Political Pressure: CIBC Capital Markets points out that the high gas prices—not military risks—are putting a lot of pressure on U.S. President Donald Trump to end the war fast.
Future Projections
Global money managers are looking at two main possibilities, depending on how long the conflict lasts:
Short-Term Resolution: If the war ends by late March, oil prices will drop quickly, but they'll still be higher than before the conflict.
Prolonged Conflict: If the war goes on for another three months into June, Brent crude could skyrocket past US$200 a barrel, pushing U.S. gas prices to US$7 a gallon. 📈📉 Full report on (Global News)
