Oil Jumps Above $126 Before Retreating on Iran War Fears
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Global oil markets faced another wave of sharp volatility on Thursday, as prices briefly climbed to their highest level in four years before pulling back later in the session.
Brent crude rose as high as $126.41 a barrel, its strongest level since March 2022, before retreating as traders took profits and the market absorbed signs of heavy selling. U.S. West Texas Intermediate also gave up part of its earlier gains, underscoring how sensitive energy markets have become to any new signal from the U.S.-Iran conflict.
The latest surge followed reports that Washington was considering additional military options against Iran, raising fears that the conflict could deepen and cause a prolonged disruption to Middle Eastern energy supplies. The uncertainty around the Strait of Hormuz remains central to the market’s concern because of its importance to global oil and gas flows.
For Canada, the story matters beyond international markets. Higher oil prices can quickly feed into gasoline, transportation, food distribution and household costs. The Bank of Canada has already warned that higher global energy prices are pushing inflation upward, while gasoline and elevated food prices are squeezing Canadian families.
Recent Canadian inflation data also showed that energy prices, especially gasoline, helped lift inflation in March, making any renewed jump in oil prices a sensitive issue for consumers, interest rates and the cost of living.
Even after the retreat from the day’s peak, the signal from the market is clear: any further escalation in the Iran war could send oil prices sharply higher again, leaving governments and central banks with a difficult balance between protecting economic growth and controlling inflation.
