While the war in Iran has sent gasoline prices soaring around the world, there are growing concerns about how the spike in the cost of other fuels could also affect consumers and the broader economy.

In Canada, the average price of diesel has surged to nearly $2.30 per litre — more than 50 per cent higher than just three months ago.

“It’s unprecedented. We’ve never seen anything like this in the oil market or the refined products market and it’s getting worse,” said Calgary-based petroleum industry analyst Richard Masson.

“The tankers that left four weeks ago just before the war started are just starting to unload at their destinations,” he continued.

“It takes three to four weeks to get where they’re going, but over the last four weeks there have been no tankers leaving out of the Strait of Hormuz.

“So over the next few weeks, places that need those fuels aren’t going to be getting them.”

Masson said the refined products market is experiencing prices like $200 a barrel for diesel fuel.

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“And more than that, countries like China have banned exports of refined products. So there are places like California, that depend on refined products coming from China because they’ve had many refineries shut down, who are now scrambling to find replacements for their diesel, for their gasoline.

“The whole global market right now is totally upset, and people are still trying to understand what it all means.”

Small business owners in Alberta are also waiting to see what happens, depending on how long the war drags on.

“Well, the price is going to affect freight and delivery, for sure,” said Ernie Tsu of the Alberta Hospitality Association, who is also owner of the Trolley 5 Brewpub in Calgary.

“We haven’t seen it come down yet from the major suppliers. I’m sure it’s going to,” said Tsu, who admits restaurant menu prices will need to increase if freight and delivery charges increase.

However, Tsu said a lot of restaurants are working with local farmers in an effort to keep transportation costs down and still provide excellent products and that helps “massively.”

Masson said if diesel prices get too high, it could cause the entire supply chain to break down.

“There’s two parts to that. One is the price gets higher for transportation because of the diesel cost and so that gets transmitted through to prices,” said Masson.

“The other is people just can’t get hold of the product physically and so they stop shipping things and so the supply chains start to break down.

“I’m seeing more and more talk about supply chains breaking down like happened during COVID.”

While the members of the International Energy Agency recently agreed to release hundreds of millions of oil from their strategic emergency reserves in an effort to combat a possible shortage of Middle East oil, Masson said it may not help prevent a shortage of diesel, because it’s not the right kind of oil.

“The Middle East produces kind of a medium-sour crude, and that crude goes into refineries and makes a larger proportion of diesel and a smaller proportion of gasoline.

“When that crude goes missing, it affects the diesel supply more and this is the challenge because not all crude oil is the same.”

While much of the oil produced in Canada is suitable for making diesel, Masson said most of the recent increase in U.S. production is lighter oil obtained through fracking, and is not suitable for making diesel.

“We have this real problem where not only is there a smaller supply of crude, but it’s not the right kinds of crude in the right refineries to keep production of things like diesel going at the rate we need — and of course, the economy depends on diesel,” said Masson.

“So we we have to find a way to adjust our consumption and the way we do that is by price. So the higher the price goes, more people will stop using it and only the best uses will happen.

“This is what’s going to happen over the coming weeks as this (crisis) deepens.”

&copy 2026 Global News, a division of Corus Entertainment Inc.

A key plank of Canadian Prime Minister Mark Carney’s climate plan will likely ​miss its target implementation date, industry sources said, raising new doubts about Canada meeting its environmental goals in the face of higher oil prices and uncertain U.S. trade policy.

Carney, a former U.N. climate envoy, committed last fall to negotiating a stronger industrial carbon pricing policy with Alberta by April 1.

He is counting on a strengthened pollution pricing scheme to keep Canada’s emission reduction targets on track after rolling back many of his predecessor Justin Trudeau’s climate policies to restore friendlier relations with the oil-and-gas producing province and prioritize economic growth.

11:31
Carney rejects ‘hypocrisy’ claim on Alberta pipelines, defends low-carbon energy

Two industry sources familiar with the talks told Reuters these negotiations have been challenging, and that no deal will be struck by the April 1 deadline ‌because large oil sands companies are pushing back on parts of the federal proposal.

Natural Resources Minister Tim Hodgson has acknowledged there may be a slight delay. “As we all know in doing deals, sometimes deals come ⁠right up to the deadline.

Sometimes they go a little bit over the deadline,” he told reporters.

One ‌of the sources said even if a pricing agreement is reached later this spring, oil sands producers are now unlikely to commit to another key part of the agreement: building the entire high-profile C$16 billion ($11.47 billion) Pathways Plus carbon capture and storage project, though a smaller, scaled-down project is ⁠possible.

The Canadian government continues to work closely with Alberta and all relevant parties and will have more to share in due course, said Keean Nembhard, press secretary for Environment Minister Julie Dabrusin.

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A ‌spokesperson for Alberta Premier Danielle Smith declined to comment directly, pointing instead to a television interview earlier this month in which she said the discussions are “complicated,” but that all parties are committed to getting to an agreement soon.

POLITICAL, ECONOMIC CLIMATE SHIFTS

Oil companies hope ⁠to boost production and sell more oil and gas to Asia in the coming ‌years to diversify away from the U.S.

Carney also wants to reduce economic dependence on the United States, which buys 90 per cent of Canada’s oil.

Now, the Iran war has bolstered global demand for Canadian oil and gas, and Canada agreed last week to support the International Energy Agency’s oil release with 23.6 million barrels from domestic producers.

6:51
Breaking down the impact of oil prices

A December report from the Canadian Climate Institute had already warned Canada is not on track to meet any of its climate targets, including its 2030 Paris Agreement commitment.

The benchmark Brent crude now trades near US$100 a barrel, about 65 per cent above its level at the start of the year.

While some Canadian oil sector leaders once spoke publicly in favour of industrial carbon ‌pricing as a way to incentivize emissions reduction, their tone has shifted.

Oil sands companies investing in carbon capture and storage should not have to pay an industrial carbon price on top of the costs of constructing and operating the project, Canadian Natural Resources CEO Scott ⁠Stauth said in a March interview.

While Stauth said he had no reason to think the April 1 deadline on carbon pricing would be missed, he noted the negotiations are complex.

“It takes time to work through all the details to ensure that the needs of all of those involved are met and that it supports the vision that I think the prime minister has for growth in Canada,” he said.

HIGHER CARBON PRICE

Stauth’s comments followed an open letter released in January by the Canadian Association of Petroleum Producers lobby ​group, which argued that higher costs for carbon directly reduce Canada’s competitiveness, at a time when the U.S. has demonstrated a “willingness to leverage all tools at their disposal ​to achieve geopolitical and energy goals.”

Both Alberta and the federal government pledged last fall to work together on a new industrial carbon pricing policy, aiming to increase the effective price the province’s heavy emitters must pay ‌on carbon from an existing C$95 a metric ton to C$130 a metric ton.

The date at which this will happen, and the price increases over time, were to be negotiated.

Alberta and the federal government also agreed to cooperate on building the Pathways Plus project, pitched by Canada’s five largest oil sands companies in 2021 to be the world’s biggest carbon ⁠capture project.

The Carney government has bundled that project together with Alberta’s vision of ‌a new pipeline to export its oil to the Pacific coast — a pipeline no company has yet committed to build — and placed them both on its priority list for ‌fast-tracking.

Just 28 per cent of countries globally require industrial emitters to pay a carbon price, ​which means Canada’s oil and gas sector has legitimate concerns about the ways in which a strengthened regime could impact ⁠its competitiveness, said Kevin Birn, ⁠head of carbon research for S&P Global.

“Canada needs to find a policy approach that ensures this industry is competitive, and ensures it can achieve its objectives around diversifying markets, but also maintains policies that are important ​to Canadians for environmental protection purposes,” he said.

2:46
Canada ‘reliable’ and ‘low-risk’ oil exporter, will up production amid energy crisis: Carney

Some Edmonton landowners are taking a stand by erecting a blockade against what they call a delinquent oil and gas company.

The group says MAGA Energy hasn’t paid its lease for three years, and therefore the company is no longer allowed on their land.

On Thursday, landowners Mark Dorin and Dale Braun put up a wooden barrier on their piece of farmland in southwest Edmonton, where MAGA Energy operates pumpjacks.

“If I’m a land owner and I don’t pay my bills, I lose my land, I lose my house,” Dorin told reporters in front of one of the company’s active wells.

“But look behind me, we’ve got (an) active pumpjack here … more pumpjacks over there on our land, all operating and they haven’t paid their bill.”

Braun, who along with his family own a 75 per cent stake in the land, said he’s not anti-oil and gas and that he believes Premier Danielle Smith’s government is on the right path when it comes to the industry. But he said he just wants the company to “grow up.”

“The laws have been broken here. They’re being broken on a daily basis and it’s being ignored,” Braun said.

Dorin said that now that the group has terminated the lease over the missing payments, MAGA Energy isn’t allowed on the land unless its employees are there to decommission the wells.

“That’s the law of Alberta and we’re going to enforce it here,” he said.

He added that the company usually has staff on site at least once a day.

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MAGA Energy did not immediately respond to a request for comment.

Dorin said the company had taken over the lease about a decade ago and at first had no issue making the payments, which he said amount to $12,000 a year.

Last year the Narwhal — an independent environmental news outlet — reported that MAGA Energy’s main refinery closed in 2023, which cut off a major revenue stream.

Dorin said he and the other landowners with stakes in the site have tried to get the provincial energy regulator to take action, but said the effort has gone nowhere.

“They’re supposed to balance the rights of that industry with the rights of these people that own this land. That’s not happening,” he said.

“We’ve got a complete loss of social licence for the industry that built this province, and thousands of landowners across this province are absolutely fed up with this lawlessness and these double standards.”

Oil and gas companies failing to pay landowners or pay property taxes to municipalities is a long-standing issue in Alberta, and MAGA Energy is just one company in arrears.

Landowners like Dorin and Braun as well as the association that represents rural municipalities in the province have been calling on the government for years to fix the problem, which has led to some policy changes.

But Dorin said it’s not that the province needs new laws to address the issue; rather he said the existing laws just need to be enforced.

In 2023 the provincial government implemented a new rule that required the Alberta Energy Regulator block the transfer of oil and gas leases to companies that were more than $20,000 in arrears. The Investigative Journalism Foundation reported last month that despite the rule, some companies, including MAGA Energy, have managed to acquire new wells.

Asked for comment on the blockade Thursday, the regulator said in a statement that agreements are private between a landowner and a company.

“The AER cannot enforce commitments between a landowner and a company not included in a written agreement,” it said.

Energy Minister Brian Jean dismissed Dorin and Braun as “activists,” but he also said that no system was perfect, “especially when it’s run by the government.”

“But I will tell you this government is focusing like a laser on this particular issue,” Jean told reporters at the legislature in Edmonton.

“For the first time ever a government is actually looking at the current process and trying to make the process a lot better.”

Jean, in a statement later Thursday, added that landowners who haven’t been paid by energy companies can file a claim with the provincial property rights tribunal, which can order the government to compensate land owners instead of private companies.

Dorin said it was an “absolute joke” that taxpayer dollars get doled out when a company refuses to pay.

“That’s roads, hospitals, libraries (and) other services that aren’t funded,” he said.

Opposition NDP energy critic Nagwan Al-Guneid said Dorin and Braun aren’t alone in their fight against oil companies not paying rent or taxes, calling it a “crisis in the management of liabilities” in the province.

“Companies have promises to fulfil to landowners, and it’s a question of how is the regulator applying the law to ensure that companies are meeting the commitments to these landowners,” she said.

“The regular needs to regulate, the government needs to start governing and ensuring that companies are meeting their commitments.”

This report by The Canadian Press was first published March 12, 2026.

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A proposal led by Calgary-based South Bow to revive ​parts of the canceled Keystone XL oil pipeline could increase Canada’s crude exports to the U.S. by more than 12 per cent, if it gets a green light from U.S. President Donald Trump and additional links to U.S. refining hubs are built.

The new proposal involves a different route through the U.S. than the previous Keystone XL pipeline project canceled by former U.S. President Joe Biden in 2021 after years of Indigenous and environmental opposition.

South Bow, which was set up by former Keystone XL proponent TC Energy in 2024 to take over its oil pipeline business, is considering reviving some of the line that was ‌already built in Alberta and already has all necessary Canadian permits.

Prime Minister Mark Carney brought up the pipeline’s revival in a conversation with Trump in October and it could provide him leverage ⁠in upcoming negotiations around renewing the U.S.-Mexico-Canada (USMCA) trade agreement.

Trump – whose tariff wars and annexation ‌threats have strained relations with Canada – has repeatedly called for lower oil prices and many U.S. refiners depend on the roughly 4.4 million barrels per day of exports that Canada sends south of the border.

South Bow’s potential U.S. partner, Bridger Pipeline, recently filed a proposal ⁠with Montana regulators that describes the construction of a 1,038 kilometre (645-mile) pipeline – capable of transporting up to 550,000 barrels per day – beginning near the U.S.-Canada border in Phillips County, Montana, and transiting ‌to Guernsey, Wyoming.

But analysts say Guernsey is not an end market for crude oil, so additional links would need to be built to transport oil to refining hubs such as Cushing, Oklahoma; Patoka, Illinois; and the U.S. Gulf Coast.

The ⁠most credible configuration would be a new pipeline spanning roughly 684 km (425 miles) from ‌Guernsey to Steele City, Nebraska, where it could connect to the existing Keystone mainline system, said Matthew Lewis, founder of Plainview Energy Analytics.

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From there, the oil could move into underutilized pipelines running toward Cushing, Patoka and Wood River, Illinois.

It remains unclear, however, who would be willing to take on the risk associated with that leg of a project.

“The biggest challenge in this plan in a Guernsey-to-Steele City segment is gaining permits, and building new pipeline that would likely face environmental litigation tying up such a project up in court,” Lewis said.

South Bow said its proposal could connect to downstream pipelines in the U.S. but declined ‌to comment further.

Bridger Pipeline declined to comment.

1:56
Trump wants Keystone XL pipeline built ‘now’ — but is there industry appetite?

LEVERAGING EXISTING INFRASTRUCTURE

Bridger is proposing to build the Montana-to-Guernsey leg in locations alongside existing pipeline infrastructure, its application states, which would likely make getting required permits easier.

On the Alberta side, approximately 150 ⁠km (93 miles) of Keystone XL pipe is already built and has been sitting idle since that project was canceled.

A White House spokesperson declined to comment on the South Bow-Bridger proposal, but analysts said a presidential permit would be required for the segment that crosses the U.S.-Canada border.

Even if the Trump administration supports the plan, there is no guarantee that the next U.S. administration would, said Richard Masson, former CEO of the Alberta Petroleum Marketing Commission.

While the proposal may be different ​than Keystone XL, it remains a large-scale pipeline expansion and will likely attract the ire of environmentalists, landowners and Indigenous communities, he said.

Many pipeline projects ​in the U.S. have been canceled or bogged down in litigation.

Trump and his team have tried to cut regulation and speed permits, but a multi-year project across more than one administration ‌would carry political risk. “It brings up all the same issues.

For those who wanted Keystone XL canceled, this is all the same stuff,” Masson said.

COMPETING EXPORT PIPELINE EXPANSIONS

The proposed project comes at the same time that the company behind the Trans Mountain pipeline from Alberta to Canada’s west coast is planning a series ⁠of enhancements that could increase its capacity by 360,000 bpd.

South Bow’s competitor, ‌Enbridge, has already approved expansion projects for its Flanagan and Mainline pipeline systems, which will add a combined 250,000 bpd of capacity for Canadian heavy oil shippers moving ‌crude to the U.S. Midwest and Gulf Coast.

Those projects are less complicated ​than South Bow’s proposal and will be more economic, said TD Securities analyst Aaron MacNeil.

He said South Bow ⁠will face questions from ⁠investors about its ability to finance a new pipeline project while maintaining its dividend and avoiding taking on too much debt.

2:34
What happens to Alberta’s $1.3B investment into Keystone XL?