Oil prices leap amid worries about crude market due to Middle East conflict
Oil prices are leaping and stocks are falling Friday over worries that Israel's attack on Iranian nuclear and military targets could escalate further and damage the flow of crude around the world, along with the global economy.
The price of a barrel of West Texas intermediate — the benchmark U.S. crude — jumped close to seven per cent on Friday morning to around US$72.65.
Brent crude, the international standard, was also up around seven per cent to US$74.30 for a barrel.
Western Canada select was selling at around $57.34 per barrel Friday morning.
Iran is one of the world's major producers of oil, though sanctions by western countries have limited its sales. If a wider war erupts, it could slow the flow of Iran's oil to its customers and keep the price of crude and gasoline higher for everyone worldwide.
Story continues below advertisement
Beyond the oil coming from Iran, analysts also pointed to the potential for disruptions in the Strait of Hormuz, a relatively narrow waterway off Iran's coast, through which much of the world's oil moves on ships.
View image in full screen
Oil prices jumped on Friday on fears that a wider Middle East conflict could disrupt traffic in the Strait of Hormuz, through which much of the world's oil supply is shipped. File
But past attacks involving Iran and Israel have seen prices for oil spike initially, only to fall later 'once it became clear that the situation was not escalating and there was no impact on oil supply,' according to Richard Joswick, head of near-term oil at S and P Global Commodity Insights.
Get breaking National news
For news impacting Canada and around the world, sign up for breaking news alerts delivered directly to you when they happen. Sign up for breaking National newsletter Sign Up
By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy
That has Wall Street waiting to see what will come next.
For now, the price of oil has jumped, but it's still lower than it was earlier this year.
'This is an economic shock that nobody really needs, but it is one that seems more like a shock to sentiment than to the fundamentals of the economy,' said Brian Jacobsen, chief economist at Annex Wealth Management.
Story continues below advertisement
Global stock markets also dipped on news out of the Middle East, with the TSX, Canada's main stock index, off about 25 points to 26,590 at around noon eastern time.
The Dow Jones Industrial Average was down about 400 points to 42,572.79 and the Nasdaq composite was off 100 points to 19,561.
Shares in Exxon Mobil rose 1.5 per cent and ConocoPhillips gained 1.9 per cent because the leaping price of crude portends bigger profits for them.
The Canadian dollar was up slightly to around 73.63 cents US.
The price of gold also climbed about 1.5 per cent, to over US$3,400 and close to a record high as investors searched for safer places to park their cash.
While sustained higher oil prices would likely lead to an increase in gasoline prices, they could be a blessing for Alberta's provincial budget, which was forecasting a $5.2-billion deficit on the expectation that oil prices would average about $68 per barrel.
Each $1 increase in the price of oil is predicted to increase provincial government revenues by about $750 million.
— with files from Reuters and Global News.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Global News
an hour ago
- Global News
What are the stakes for Canada as it hosts the G7 leaders' summit?
Canada is set to host leaders from the world's largest economies for the annual G7 summit beginning Sunday, and the stakes could not be higher. U.S. President Donald Trump's multi-front trade war has countries scrambling to get their tariffs lowered. Ceasefires have failed to stick in Gaza and Ukraine. Allies are collectively focused on boosting their defences to counter China, Russia and other threat actors. And the rise of artificial intelligence has opened up opportunities and risks on multiple fronts. For Prime Minister Mark Carney, it will mark his most high-profile stage yet as he seeks to both normalize relations with Trump and reposition Canada as an important ally. Here's what to expect over the course of the summit. Avoiding past discord, with U.S. deal possible The last time Canada hosted the G7 leader's summit was in 2018, and it quickly saw tensions flare. Story continues below advertisement Trump's clashes with then-prime minister Justin Trudeau and other leaders over trade led to the U.S. not endorsing the official G7 communique, and France's foreign minister dubbed the summit the 'G6 plus one.' A repeat of that spectacle would be a 'nightmare scenario' for both Canada and the alliance, Allen Sens, a political science professor at the University of British Columbia, said in an email. 10:54 Trump 'is not finished with tariffs' Since returning to office this year, Trump has only doubled down on actions that fuelled the discord at that earlier summit: imposing sweeping tariffs on allies, reversing or reducing climate change action, and reopening dialogue with Russia. Yet the scale of Trump's trade wars this time means leaders will likely be clamouring for their own deals on tariffs and other issues beyond the official G7 communique — including Canada. Story continues below advertisement The summit will mark the first time Carney and Trump will be face-to-face since their White House meeting in May. Pete Hoekstra, the U.S. ambassador to Canada, said Wednesday the two leaders see the gathering as an 'inflection point' in their direct negotiations toward a potential new deal. 'They're both going to be at the same place, they're both going to be in Canada, and there'd be lots of questions if there isn't something that is announced,' he said at an event in Ottawa. 'Until it happens, it's still a possibility.' What else will be discussed? Carney last week announced what he said were Canada's priorities for discussions at the G7 summit, all of which are aimed at 'building stronger economies.' Story continues below advertisement The Prime Minister's Office said Ottawa's top priority will be strengthening global peace and security, which includes countering foreign interference and transnational crime, as well as improving responses to wildfires. Get breaking National news For news impacting Canada and around the world, sign up for breaking news alerts delivered directly to you when they happen. Sign up for breaking National newsletter Sign Up By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy Canada will focus on spurring economic growth by improving energy security, fortifying supply chains for critical minerals and accelerating the use of artificial intelligence. Lastly, Canada will discuss creating jobs by securing partnerships to open new markets and generate large infrastructure investments. G7 finance ministers and central bank governors who gathered in Banff last month ahead of the leaders' summit agreed to cooperate on pursuing economic growth, ensuring price stability and certainty, tackling financial crime, and supporting Ukraine. 'I would consider any communique that contains any substantive collective agreements on major issues to be a triumph, with a bland document the most likely outcome,' Sens told Global News. 1:42 G7 finance ministers agree on joint statement, no mention of tariffs David Perry, president of the Canadian Global Affairs Institute, told Global News that Trump's influence will likely mean past issues of agreement — including shared initiatives on the environment and 'equity, diversity, and inclusion' — will either be less prominent or reduced altogether. Story continues below advertisement Yet he still believes agreements can be struck among the allies on issues of shared importance that go beyond the tensions Trump's tariffs have caused — particularly on energy security and artificial intelligence. The PMO said discussions will also include securing peace in Ukraine and other global conflicts, as well as 'a forward-looking agenda that engages partners beyond the G7.' Who else will attend? Other world leaders whose countries are not part of the G7 but who will attend the summit are the heads of Mexico, Brazil, South Korea, Australia, South Africa and Ukraine. The attendance of Mexican President Claudia Sheinbaum will mark the first time North American leaders will be together since Trump's trade wars threatened the Canada-United States-Mexico agreement on free trade (CUSMA) that's up for review next year. Ukrainian President Volodymyr Zelenskyy has said he will ensure talks at the summit and other high-level gatherings in the weeks ahead don't lead to 'hollow' agreements on the war in his country. Story continues below advertisement Indian Prime Minister Narendra Modi will also attend at Carney's invitation, a move that has attracted criticism from diaspora groups in Canada — including members of Carney's Liberal caucus. Modi's government has been accused of being involved in violence and intimidation against Sikh activists and politicians in Canada, including the murder of Hardeep Singh Nijjar in British Columbia in 2023. 6:02 International relations expert says India should have a seat at G7 table Carney's government also invited Saudi Arabia's Crown Prince Mohammed Bin Salman to the summit, Global News has learned, but the Saudi leader has not yet publicly accepted the invitation. NDP foreign affairs critic Heather McPherson accused the government of turning the summit into a 'showcase of tyrants' with the invitations of bin Salman and Modi during question period on Tuesday. Foreign Affairs Minister Anita Anand responded that the G7 is 'a critical forum for global leaders to have productive and frank discussions.' Story continues below advertisement Vina Nadjibulla, vice-president of the Asia Pacific Foundation of Canada, said Trump's election and the growing threat environment requires a 'different approach' to diplomatic relations, which is on display under Carney. The invitation to Modi was particularly necessary, she said, given the size of India's economy and strategic importance. She added that restoring the relationship with India could lead to further cooperation on the issue of transnational violence and foreign interference. 'I think we need to recognize that in today's more dangerous world, we need to be able to engage and have high-level talks with counties with whom we have serious disagreements,' she told Global News. 'Diplomacy is not a favour to our friends — it's a tool to advance our interests and protect our values.' Why Canada's leadership matters Perry said Canada will have its work cut out in chairing the G7, but agreed the timing was good that the responsibility came up this year, with Trump's trade war still in its early stages. Story continues below advertisement 'You do get to have a role in shaping things, and you do get to find yourself at a table that you arranged, literally, for a discussion that you helped set the agenda of, with the leaders of … most of the major economies in the world, including the president of the United States,' he said. 'It's a pretty unique role and opportunity for Canada.' He suggested the summit will also be a pivotal test for Carney as prime minister — not just in the relationship with Trump, but with the other leaders at that table. 'If the Prime Minister of Canada can't make good use of time with six world leaders and an opportunity of Canadian creation, he probably should be considering other lines of work,' he said.
Global News
10 hours ago
- Global News
Danielle Smith pitches B.C. on pipeline project, saying it benefits ‘all Canadians'
Alberta Premier Danielle Smith is making a pipeline pitch directly to British Columbians. Smith told Global News that Canada needs to take advantage of this moment of national unity to respond to U.S. President Donald Trump's threats. 'When you look at the potential for a million barrels a day at today's prices, that's about 20 billion dollars worth of value,' Smith told Focus BC. 'It doesn't just go to Alberta, it benefits all Canadians.' Smith is leaning on the Team Canada approach but does acknowledge that there still need to be work to address Indigenous concerns. 'We hear the environmental concerns and that is why it is good to have Indigenous partners so we can reroute the route, and deal with issues on the ground,' she said. Story continues below advertisement 'I know a few things need to be modified, but we can get to yes.' 2:01 Pipeline dream: Alberta premier makes pitch at Global Energy Show There is still no proponent for the pipeline project but the previous iteration of a pipeline to the coast destroyed the relationship with then Alberta Premier Alison Redford and then B.C. Premier Christy Clark. Get breaking National news For news impacting Canada and around the world, sign up for breaking news alerts delivered directly to you when they happen. Sign up for breaking National newsletter Sign Up By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy Smith said the difference this time is the vision to export the material out of Prince Rupert, rather than Kitimat, where navigating tankers is harder. 'Let's go to a port that is already shipping goods, that is ice-free year-round,' she added. B.C. Energy Minister Adrian Dix says the province is opposed to the new pipeline and instead, Alberta should focus on building out the Trans Mountain Pipeline expansion, which already cost taxpayers more than $34 billion. Story continues below advertisement 'We still need to get some work to get value for that pipeline,' Dix said. 'We have been supportive of that now that taxpayers have paid for it. The idea that taxpayers would subsidize a project that has no proponent makes no sense to us.' Watch the full interview with Smith above.
Global News
10 hours ago
- Global News
Owner of iconic La Ronge business grapples with wildfire decimation
See more sharing options Send this page to someone via email Share this item on Twitter Share this item via WhatsApp Share this item on Facebook The iconic Robertson's Trading Post in La Ronge, Sask. went up in flames as a wildfire bore down on the northern community. Get breaking National news For news impacting Canada and around the world, sign up for breaking news alerts delivered directly to you when they happen. Sign up for breaking National newsletter Sign Up By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy Owner Scott Robertson is still coming to terms with the shocking loss, despite being able to save his own family cabin by staying behind and fighting the flames himself. He showed Global News the damage the PISEW fire wrought firsthand.
