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NEW YORK — Escalating conflict between the United States and Iran is sending shockwaves through global energy markets, with crude prices climbing sharply as fighting shows no sign of ending.
U.S. President Donald Trump has vowed further strikes while Tehran says it will not surrender, raising fears of prolonged disruptions to global oil supplies.
Markets reacted quickly. West Texas Intermediate crude rose nearly US$91 per barrel, up about $9.89 or more than 12 per cent, while Brent crude climbed to just under US$93 per barrel, gaining roughly $7.28, or more than eight per cent.
Western Canadian Select — a key benchmark price for Alberta’s oil sands crude — also surged, trading above US$73 per barrel as global markets adjusted to tightening supply.
While rising oil prices often translate into higher fuel costs, Alberta’s fuel tax relief program means some drivers could see a benefit if crude prices remain elevated.
The program links the provincial fuel tax directly to the price of West Texas Intermediate crude. When the average price of WTI reaches $90 per barrel or higher, Alberta pauses the provincial fuel tax on gasoline and diesel, reducing the tax rate to zero cents per litre.
If oil prices average between $85 and $89.99 per barrel, the tax is partially reinstated at 4.5 cents per litre. When WTI averages between $80 and $84.99, the tax rises to nine cents per litre. If oil prices fall below $79.99 per barrel, the full 13-cent-per-litre provincial fuel tax returns.
The quarterly adjustment is based on the average WTI price during the 20 trading days leading up to the 16th of the month before the next quarter begins.
Traders now face another week of market uncertainty as the conflict continues, with many economists expecting crude prices could climb above US$100 per barrel if supply disruptions persist.
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