This article supplied by Troy Media.

 By Rashid Husain Syed

The Israel-Iran conflict just flipped the script on falling oil prices, pushing them up fast, and that spike could hit your wallet at the pump

Oil prices are no longer being driven by supply and demand. The sudden escalation of military conflict between Israel and Iran has shattered market stability, reversing earlier forecasts and injecting dangerous uncertainty into the global energy system.

What just days ago looked like a steady decline in oil prices has turned into a volatile race upward, with threats of extreme price spikes looming.

For Canadians, these shifts are more than numbers on a commodities chart. Oil is a major Canadian export, and price swings affect everything from
provincial revenues, especially in Alberta and Saskatchewan, to what you pay at the pump. A sustained spike in global oil prices could also feed inflation, driving up the cost of living across the country.

Until recently, optimism over easing trade tensions between the U.S. and China had analysts projecting oil could fall below US$50 a barrel this year. Brent crude traded at US$66.82, and West Texas Intermediate (WTI) hovered near US$65, with demand growth sluggish, the slowest since the pandemic.

That outlook changed dramatically when Israeli airstrikes on Iranian targets and Tehran’s counterattack, including hits on Israel’s Haifa refinery, sent shockwaves through global markets. Within hours, Brent crude surged to US$74.23, and WTI climbed to US$72.98, despite later paring back overnight gains of over 13 per cent. The conflict abruptly reversed the market outlook and reintroduced a risk premium amid fears of disruption in the world’s critical oil-producing region.

Amid mounting tensions, attention has turned to the Strait of Hormuz—the narrow waterway between Iran and Oman through which nearly 20 per cent of the world’s oil ows, including supplies that inuence global and
Canadian fuel prices. While Iran has not yet signalled a closure, the possibility
remains, with catastrophic implications for supply and prices if it occurs.

Analysts have adjusted forecasts accordingly. JPMorgan warns oil could hit US$120 to US$130 per barrel in a worst-case scenario involving military conflict and a disruption of shipments through the strait. Goldman Sachs estimates Brent could temporarily spike above US$90 due to a potential loss of 1.75 million barrels per day of Iranian supply over six months, partially offset by increased OPEC+ output. In a note published Friday morning, Goldman Sachs analysts Daan Struyven and his team wrote: “We estimate that Brent jumps to a peak just over US$90 a barrel but declines back to the US$60s in 2026 as Iran supply recovers. Based on our prior analysis, we estimate that oil prices may exceed US$100 a barrel in an extreme tail scenario of an extended disruption.”

Iraq’s foreign minister, Fuad Hussein, has issued a more dire warning: “The Strait of Hormuz might be closed due to the Israel-Iran confrontation, and the world markets could lose millions of barrels of oil per day in supplies. This could result in a price increase of between US$200 and US$300 per barrel.”

During a call with German Foreign Minister Johann Wadephul, Hussein added: “If military operations between Iran and Israel continue, the global market will lose approximately five million barrels per day produced by Iraq and the Gulf states.”

Such a supply shock would worsen inflation, strain economies, and hurt both exporters and importers, including vulnerable countries like Iraq.

Despite some analysts holding to base-case forecasts in the low to mid-US$60s for 2025, that optimism now looks fragile. The oil market is being held hostage by geopolitics, sidelining fundamentals.

What happens next depends on whether the region plunges deeper into conflict or pulls back. But for now, one thing is clear: the calm is over, and oil is once again at the mercy of war.

Toronto-based Rashid Husain Syed is a highly regarded analyst specializing in energy and politics, particularly in the Middle East. In addition to his contributions to local and international newspapers, Rashid frequently lends his expertise as a speaker at global conferences. Organizations such as the Department of Energy in Washington and the International Energy Agency in Paris have sought his insights on global energy matters.

Troy Media empowers Canadian community news outlets by providing independent, insightful analysis and commentary. Our mission is to support local media in helping Canadians stay informed and engaged by delivering reliable content that strengthens community connections and deepens understanding across the country.

MxM News

Quick Hit:

President Trump will leave the G7 summit early following rising tensions in the Middle East. In a Truth Social post Monday night, he warned “everyone should immediately evacuate Tehran” and slammed Iran for rejecting a proposed nuclear deal.

Key Details:

• “Iran should have signed the ‘deal’ I told them to sign,” Trump posted on Truth Social Monday night, warning that “IRAN CAN NOT HAVE A NUCLEAR WEAPON.”

• “Everyone should immediately evacuate Tehran,” he added, echoing warnings from Israeli officials issued earlier in the day ahead of expected military operations.

• Trump’s press secretary, Karoline Leavitt, confirmed he will leave the G7 in Alberta after a working dinner with world leaders, citing the evolving conflict in the Middle East.

Diving Deeper:

President Donald Trump will cut his G7 visit short and return to the United States Monday night after issuing an urgent warning for mass evacuations in Iran’s capital city. The message, shared on his official Truth Social account, came amid intensifying military conflict between Israel and Iran.

“Iran should have signed the ‘deal’ I told them to sign. What a shame, and waste of human life,” Trump wrote. “Simply stated, IRAN CAN NOT HAVE A NUCLEAR WEAPON. I said it over and over again! Everyone should immediately evacuate Tehran!”

The post follows Israel’s repeated missile strikes on Iranian targets, including nuclear facilities and regime leadership, in response to Tehran’s escalated provocations. Monday marked the fourth consecutive day of fighting between the two nations.

Earlier in the day, Israeli officials had already advised residents in northeastern Tehran to evacuate, foreshadowing continued strikes. According to Israeli military estimates, one-third of Iran’s ballistic missile launchers have been destroyed so far in the renewed conflict.

While attending the G7 summit in Canada, Trump emphasized the gravity of the situation. His press secretary, Karoline Leavitt, confirmed that he will depart after dinner with fellow heads of state. “Much was accomplished,” she posted, noting a major trade deal signed with the UK, “but because of what’s going on in the Middle East, President Trump will be leaving tonight.”