Carol Montreuil says Essence will ease after $83 oil, $1.80 gas

Essence has already pushed oil down, with the market at about 83 $ US a barrel Monday and gasoline around 1.80 $ CAN at the pump. For motorists and PME, Carol Montreuil called it “À l’aube des vacances, pour les automobilistes et pour les PME, c’est une excellente nouvelle.”

Montreuil on gasoline

Montreuil, vice-president, économie, à l’Association canadienne des carburants, expects gasoline prices to stabilize if the agreement holds. She also said she does not expect pump prices to return soon to pre-conflict levels, which keeps the immediate relief real but limited for households and small businesses watching fuel bills.

The agreement between Iran and the United States was announced and was expected to be signed on Friday. Its first effect was already visible in the oil market, and that matters because fuel costs feed straight into driving, shipping and the rest of the consumer bill.

Ormuz congestion

Weeks or even months may be needed to désengorger le détroit d’Ormuz, according to Montreuil. Thousands of ships are stopped there, and the strait carries one-fifth of the world’s oil and natural gas, so the flow of energy and goods cannot normalize overnight.

Several countries, including the United States, used strategic oil reserves during the crisis. Pierre-Marc Gervais said states will want to rebuild their reserves, and that balancing the market will take several months. Damaged infrastructure in several Gulf regions also still needs repairs, which adds another layer of delay to any return to normal pricing.

Airfares and goods

Éric Boissonneault said airline ticket prices had already returned to normal after an April surge and a drop in demand, but aviation fuel remained 25% higher than before the war and 62% higher than on January 1. He said airlines had to protect fuel surpluses and may have been forced to pass prices to consumers even while losing money.

Boissonneault also said the people who wanted to book flights had almost all already done so, and that summer sales were slowing. Pierre-Marc Gervais said it is not necessary to wait for a price drop before flying, but concrete effects should take a few more months to show up. Prices for some products are likely to stay elevated while global maritime traffic remains disrupted and oil costs stay above their earlier levels.