The ongoing U.S.-Israel war against Iran is causing diesel prices to spike across Canada, climbing nearly 30 per cent since the conflict began.

The average retail price of diesel reached $2.19 per litre this week, which is the highest price since 2022, when Russia invaded Ukraine.

Diesel prices are much higher compared to regular gasoline, which is selling on average at the pumps for $1.75 per litre, according to Kalibrate Canada, a fuel data and analytics firm.

The surging diesel price is expected to cause higher shipping costs, since it is the lifeblood of the transportation sector to move trucks, trains and barges.

“People need to worry about diesel prices because that is the fuel for which consumer goods and services are delivered,” said Andrew Lipow, president of Lipow Oil Associates.

Farmers, trucking companies and transit groups in the country are already feeling the financial squeeze from the price spike, and experts say that could ultimately be passed on to consumers.

The rising diesel prices were immediately noticeable for Trevor Wideman, sales manager at West Coast Transportation in London, Ont., considering the company’s semi trucks have tanks that take about 1,000 litres to fill.

“Every time there’s a conflict in the Middle East, oil and fuel prices go up instantly,” he said.

Transportation companies pass on the expenses, eventually making their way to the consumer, “whether you’re buying ketchup in the grocery store or metal parts to build an airplane,” Wideman said.

On Tuesday, the highest average diesel price was in Chicoutimi, Que., at $2.49 per litre, while the cheapest was in Grande Prairie, Alta., at $1.85.

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Global oil prices continue to soar, impacting costs for Canadians

The price of crude oil continues to rise amid the U.S.-Israel war with Iran and the closure of the Strait of Hormuz, increasing costs at home for Canadians.

Rising fuel prices are a tough blow for companies already facing tariff challenges, said Dennis Darby, chief executive of the Canadian Manufacturers and Exporters. High diesel costs drive up transportation costs, while some facilities use diesel as part of their production.

“We’ve seen increases already in the last week or so in the cost of air transportation including freight. We’re seeing it now starting to impact transportation in general,” said Darby.

“If misery loves company, every sector is being affected.”

The conflict in the Middle East has effectively closed the Strait of Hormuz, an important shipping lane for about a fifth of the world’s oil and natural gas. 

North American oil prices have jumped by nearly 50 per cent, since the conflict began.

Trucking and rail companies are already increasing their fuel surcharges, said Lipow, the analyst.

“Not only that, we’re worried about the upcoming agricultural season where farmers are getting ready to do their spring planting. They’re using not only diesel fuel, but higher cost fertilizer, and that will eventually translate into higher food costs,” he said.

Lipow also says he doesn’t see the war’s impact on diesel easing off anytime soon. “Unfortunately with no near term end in sight and projections that it could go on for several more weeks, I’m expecting that diesel prices continue to increase,” said Lipow.

“The conflict in Iran has impacted not only crude oil production but the exports of diesel and jet fuel out of the Middle East. At the same time, Asian refiners who are depending on crude oil out of the Middle East have had to cut their refinery operating rates, further exacerbating any supply shortage,” he said.