Oil price spikes will hit Canadians ‘throughout our economy,’ experts say

Canadian consumers are going to feel it in their wallets just about everywhere the longer the Iran war goes on, while some parts of the economy could see benefits.

Soaring oil prices from the Iran war will hit Canadians “throughout our economy,” experts say.

“The spike in energy costs won’t just be felt at the pump. It will be an added layer of costs and complexity throughout our economy, impacting everything from jet fuel to trucking and shipping costs,” Bryan Detchou, a senior director at the Canadian Chamber of Commerce, said in a statement.

“Rural communities, where diesel is at times essential, may feel this particularly hard. Rising transportation costs will drive up prices on groceries and everyday goods like plastics, food, fertilizer, clothing, electronics, furniture, and home building materials.”

Iran has effectively closed the Strait of Hormuz by threatening to attack virtually any vessel passing through the vital choke point in the Persian Gulf, which sees about 20 per cent of the world’s oil supply.

Oil tankers and cargo ships have been avoiding the narrow waterway for roughly a week, which means oil and other commodities are at risk of running low.

Plus, Iran has been attacking targets in the Gulf region and beyond, including oil and gas infrastructure in neighbouring countries like Qatar.

“Everything that we do relies on oil either as a byproduct or directly as an energy source for us, even to turn our computer on, for instance,” said Andre Cire, an associate professor of operations management and supply chain analytics at the University of Toronto’s Rotman School of Management.

“So, all of society is physically connected to oil, to energy — everything’s connected to oil.”