{"id":735992,"date":"2026-06-14T10:37:25","date_gmt":"2026-06-14T10:37:25","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/735992\/"},"modified":"2026-06-14T10:37:25","modified_gmt":"2026-06-14T10:37:25","slug":"historys-worst-energy-crisis-minus-the-price-shock","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/735992\/","title":{"rendered":"History\u2019s worst energy crisis, minus the price shock"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

Gasoline prices in Canada have risen by 30 per cent since the conflict in Iran began.Fred Lum\/The Globe and Mail<\/p>\n

This is a reminder that we\u2019re still living through the worst energy crisis in modern history.<\/p>\n

It hasn\u2019t really felt like it so far. Sure, gasoline prices in Canada are up by 30 per cent since the conflict in Iran began, but that\u2019s nowhere close to their peak after Russia invaded Ukraine in 2022.<\/p>\n

More importantly, the pain has not spread beyond the pump. Higher energy prices haven\u2019t bled into broader inflation pressures, not yet at least. Nor has the economy buckled under the weight of the largest oil supply disruption on record.<\/p>\n

Around one-fifth of the world\u2019s oil supply was taken out when the Strait of Hormuz was effectively shut down more than three months ago after U.S. and Israeli strikes on Iran, raising the spectre of US$200-a-barrel oil.<\/p>\n

Canada\u2019s trade surplus widens in April as soaring crude prices drive record exports<\/a><\/p>\n

Prices never got anywhere close to that. U.S. crude oil futures currently trade at around US$85 a barrel.<\/p>\n

As far as crises go, this one feels remarkably mild. But we\u2019re not out of the woods, even with the possibility of a peace deal between the U.S. and Iran.<\/p>\n

A series of stopgap measures has proven surprisingly effective at keeping the economic fallout contained, the main one being the drawdown of existing reserves of crude oil. China, for example, has relied on its vast stockpiles to reduce the amount of oil it imports by nearly 40 per cent since the crisis began.<\/p>\n<\/p>\n

There are limits to such buffers, however, and they are coming into view. The industry itself is saying so. <\/p>\n

In some parts of the world, oil inventories are dwindling fast. The U.S. strategic reserve is nearing its lowest level in more than 40 years. <\/p>\n

\u201cWe\u2019re approaching unheard-of inventory levels,\u201d Exxon Mobil Corp. senior vice-president Neil Chapman said at a recent conference in New York. \u201cOnce you get to that point, then you\u2019ll see price shoot up.\u201d<\/p>\n

War in Iran has global companies staring at a $25-billion war bill \u2013 and counting<\/a><\/p>\n

Chevron Corp. CEO Mike Wirth said global inventories will bottom out \u201cbefore long\u201d in an interview with Bloomberg two weeks ago. \u201cJune and July are going to be critical months.\u201d<\/p>\n

On Friday, oil traders appeared cautiously optimistic that a peace deal could soon see the Strait of Hormuz reopened to tanker traffic.<\/p>\n

Let\u2019s see if this agreement holds. U.S. President Donald Trump has spent the past three-plus months claiming a deal with the Iranians was just around the corner \u2013 at least 38 times, in fact, by CNN\u2019s count.<\/p>\n

Plus, Mr. Trump was already lashing out at Iranian officials on Friday afternoon, calling them \u201cdishonourable\u201d for how the potential deal is being characterized by state media.<\/p>\n

Even if an agreement is struck and the stalemate in the Strait of Hormuz is broken, the world does not just go back to normal.<\/p>\n

Eric Reguly: The oil price shock is far from over even if the U.S.-Iran ceasefire holds<\/a><\/p>\n

\u201cIt would probably take weeks, if not months, for shipping traffic to return to pre-war levels,\u201d Kieran Tompkins, senior climate and commodities economist at Capital Economics, wrote in a note.<\/p>\n

\u201cThe oil market is still fundamentally severely misbalanced.\u201d<\/p>\n

The Strait of Hormuz will also remain a riskier route than it was before the war. <\/p>\n

\u201cShipping companies would surely hesitate afterward to send their fleets back to the region, especially if the political situation remained tense,\u201d Jocelyn Paquet, a senior economist at National Bank of Canada, wrote in a note.<\/p>\n

Look at what happened with the Bab el-Mandeb Strait near Yemen. Even after the attacks by Houthi rebels on commercial ships ceased last year, shipping volumes are still down by around 40 per cent. <\/p>\n

Plus, production will also take some time to get back up to speed. For example, the Abu Dhabi National Oil Company, which is the third largest oil producer in the Middle East, said it could take as long as a year to get back to full flows.<\/p>\n

In the meantime, many countries will be eager to replenish depleted reserves. Competition for barrels will likely keep the price of oil well bid.<\/p>\n

The world has proven remarkably nimble in managing this crisis and avoiding what was shaping up to be a global economic trainwreck. We\u2019re probably safe to take US$200-a-barrel oil off the table. But the same goes for the sub-US$60 levels we had at the start of this year, before we learned how easy it is to cut off one of the world\u2019s most important energy chokepoints.<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: Gasoline prices in Canada have risen by 30 per cent since the conflict…\n","protected":false},"author":2,"featured_media":735993,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[901,888,902,879,877,903,45,49,48,876,895,896,891,878,875,46,549,295,894,887,914,880,881,893,889,890,884,904,885,909,910,912,907,911,905,908,882,898,899,714,897,906,865,61,900,892,886,883,913],"class_list":["post-735992","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-alberta","tag-arts-news","tag-bc","tag-breaking-news","tag-breaking-news-video","tag-british-columbia","tag-business","tag-ca","tag-canada","tag-canada-news","tag-canada-sports","tag-canada-sports-news","tag-canada-trafficcanada-weather","tag-canadian-breaking-news","tag-canadian-news","tag-economy","tag-education","tag-environment","tag-federal-government","tag-foreign-news","tag-globe-and-mail","tag-globe-and-mail-breaking-news","tag-globe-and-mail-canada-news","tag-government","tag-life-news","tag-lifestyle","tag-local-news","tag-manitoba","tag-national-news","tag-new-brunswick","tag-newfoundland-and-labrador","tag-northwest-territories","tag-nova-scotia","tag-nunavut","tag-ontario","tag-pei","tag-photos","tag-political-news","tag-political-opinion","tag-politics","tag-politics-news","tag-quebec","tag-sports-news","tag-technology","tag-travel","tag-trudeau","tag-us-news","tag-world-news","tag-yukon"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/735992","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=735992"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/735992\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/735993"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=735992"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=735992"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=735992"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}