{"id":70954,"date":"2026-03-12T10:00:03","date_gmt":"2026-03-12T10:00:03","guid":{"rendered":"https:\/\/www.pantheregroup.com\/2026\/03\/12\/the-bids-just-dried-right-up-iran-driven-oil-shock-ripples-through-canadian-economy\/"},"modified":"2026-03-12T10:00:03","modified_gmt":"2026-03-12T10:00:03","slug":"the-bids-just-dried-right-up-iran-driven-oil-shock-ripples-through-canadian-economy","status":"publish","type":"post","link":"https:\/\/www.pantheregroup.com\/2026\/03\/12\/the-bids-just-dried-right-up-iran-driven-oil-shock-ripples-through-canadian-economy\/","title":{"rendered":"&#039;The bids just dried right up&#039;: Iran-driven oil shock ripples through Canadian economy"},"content":{"rendered":"<div style=\"text-align:center\"><\/div><p> \n<br \/><br \/>\n<iframe loading=\"lazy\" title=\"Why Canada&#039;s Oil wins during an Iran War\" width=\"1080\" height=\"608\" src=\"https:\/\/www.youtube.com\/embed\/vt50N2uGwQY?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><br \/>\n<\/iframe><\/p>\n<p> A global supply shock triggered by war in the Middle East is rippling through Canada\u2019s economy, pushing up costs for farmers, businesses and consumers even as surging <\/p>\n<p>                        energy prices<\/p>\n<p>                         boost the outlook for oil and gas producers and fuel exporters. <\/p>\n<p> Less than two weeks after the United States and Israel\u2019s strikes on Iran effectively shut the world\u2019s most important oil transit route \u2014 the <\/p>\n<p>                        Strait of Hormuz<\/p>\n<p>                         \u2014\u00a0 the fallout is quickly spreading beyond energy markets, with shipping disruptions already jamming <\/p>\n<p>                        grain sales<\/p>\n<p>                         for Canadian farmers. <\/p>\n<p> Grain that was originally bound for the Middle East is now being delayed or redirected to other markets such as China and India, according to grain brokers, temporarily swelling supplies in those regions and weakening demand for Canadian pulse crops like peas and lentils. <\/p>\n<p> \u201cNone of our traders at the coast want to take product in Vancouver to export because they\u2019re not confident when they would be able to ship it to India or China,\u201d Chevy Johnston, chief executive of Johnston\u2019s Grain Ltd., a Canadian agricultural brokerage, said. <\/p>\n<p> \u201cThey don\u2019t want to be stuck holding inventory, uncertain about when they can send it and what it\u2019s going to cost them, so they\u2019ve backed off their bids. The bids basically just dried right up.\u201d <\/p>\n<p> More worrying than the disruption to trade routes is the potential for a \u201ccalamitous\u201d loss of physical oil supply in the coming weeks, experts say, after nearly seven million barrels per day of <\/p>\n<p>                        oil production capacity<\/p>\n<p>                         from Saudi Arabia, Iraq, the United Arab Emirates and Kuwait have been shut in due to the closure of the Strait of Hormuz. <\/p>\n<p> The <\/p>\n<p>                        International Energy Agency<\/p>\n<p>                         announced on Wednesday that its member countries would release 400 million barrels of oil from their emergency stocks \u2014 the largest reserve release in history in response to rising prices and the risk of a supply shock. <\/p>\n<p> Crude prices have surged nearly 40 per cent since the start of the year, reaching almost US$120 per barrel on Monday as the conflict choked the flow of roughly one-fifth of the world\u2019s oil supply. Prices for refined fuels are rising even faster, market watchers warn, including gasoline, diesel, propane and jet fuel, which climbed over US$200 per barrel in Singapore last week as airlines scrambled to secure supply. <\/p>\n<p> Natural gas prices<\/p>\n<p>                         are also climbing after shipments of liquefied natural gas (LNG) stopped leaving Qatar \u2014 the world\u2019s second-largest LNG exporter \u2014 five days ago, Bloomberg reported Wednesday. <\/p>\n<p> Even if the crisis ended today and the strait reopened, it would take time to bring some of the lost production back online, said Rory Johnston, oil market researcher and founder of Commodity Context. <\/p>\n<p> \u201cRight now, there is no base case forecast,\u201d the former Scotiabank economist said. <\/p>\n<p> \u201cThe question on everyone\u2019s mind \u2014 and what the market is attempting to handicap in real time \u2014 is essentially how long the strait remains closed and what the White House is going to do in the interim to soften this calamitous loss of supply.\u201d <\/p>\n<p> Higher oil prices \u2014 and the ripple effects on gasoline, transportation, food and manufacturing costs \u2014 could weigh on consumers and businesses for the next few months, the U.S. Energy Information Administration said this week. <\/p>\n<p> The agency sharply raised its price outlook for the second quarter, forecasting benchmark U.S. West Texas Intermediate crude will average US$84.56 a barrel from April through June, citing supply disruptions linked to fighting in the Middle East. <\/p>\n<p> However, a number of crude market analysts, including Rory Johnston, warn that forecast could prove optimistic if the closure of Hormuz drags on or more production is shut in. <\/p>\n<p> The market has yet to feel the full impact of the disruption because tankers that left the region before the closure are still arriving at their destinations, meaning the full supply gap has yet to hit global markets, the oil researcher said. It typically takes oil tankers about six weeks to complete those voyages, he noted. <\/p>\n<p> \u201cWhat this is is a physical scramble for barrels,\u201d he said. Asian refineries could find themselves \u201cwithin a week or two, desperately short of crude.\u201d <\/p>\n<p> Meanwhile, energy stocks have surged alongside oil prices, boosting cash flows for Canadian energy producers. The rally has upended expectations going into 2026 that a global supply glut would keep prices in check. <\/p>\n<p> Producers and energy investors are welcoming the unexpected windfall, but the industry also knows that beyond a certain level, extreme price spikes can backfire by triggering \u201cdemand destruction\u201d as consumers and businesses cut back. <\/p>\n<p> AltaGas Ltd.<\/p>\n<p>                         chief executive Vern Yu\u00a0 \u2014 whose company ships propane to Asia from its export terminal on the B.C. coast \u2014 said on a conference call Friday that the premium for selling cargoes into Asia has increased by nearly 50 per cent since the start of the year. <\/p>\n<p> But Yu also signalled the company is taking a conservative approach \u2014 having hedged around 80 per cent of its export volumes for the year \u2014 rather than banking on the possibility of larger returns from the geopolitical turmoil. <\/p>\n<p> \u201cWe\u2019re perhaps being a bit cautious,\u201d Yu said. \u201cBut if this continues to play out where the straits are shut down for an extended period of time, I think we\u2019re in a good position with our current financial hedges that we don\u2019t really need to do any more.\u201d <\/p>\n<p> Rising energy costs are already filtering through the broader Canadian economy. <\/p>\n<p> Higher jet fuel costs are making flights more expensive to operate, a <\/p>\n<p>                        WestJet<\/p>\n<p>                         spokesperson said, adding that \u201cfurther pricing adjustments may be needed.\u201d <\/p>\n<p> Consumers are also likely to feel the downstream effects of rising fuel and fertilizer costs for farmers. <\/p>\n<p> Chevy Johnston said suppliers of pesticides and other agricultural chemicals are warning that prices could soon jump. Container shippers have already added a \u201cwar premium\u201d on some routes to cover higher fuel costs and war-risk insurance. <\/p>\n<p> Having weathered the shipping turmoil of the COVID-19 pandemic, the grain trader said the early days of a supply shock are often the most chaotic. <\/p>\n<p> \u201cThis will be the worst of it,\u201d he said. \u201cIt\u2019s pretty hard to just hit stop on global trade flows. It\u2019s kind of a slow, lumbering machine.\u201d <\/p>\n<p> <em>\u2022 Email: mpotkins@postmedia.com<\/em> <\/p>\n<ul class=\"related_links\">\n<li>Canada weighs options to boost oil supply as Iran war causes market turmoil<\/li>\n<li>Posthaste: How $100 oil could do Canada&#8217;s economy more harm than good<\/li>\n<\/ul>\n\n<br \/>&#039;The bids just dried right up&#039;: Iran-driven oil shock ripples through Canadian economy<\/a><br \/>\n<br \/>2026-03-12 10:00:03<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A global supply shock triggered by war in the Middle East is rippling through Canada\u2019s economy, pushing up costs for farmers, businesses and consumers even as surging energy prices boost&#8230;<\/p>\n","protected":false},"author":2,"featured_media":70955,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2026\/03\/grain-ship-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[31],"tags":[],"class_list":["post-70954","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy"],"_links":{"self":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/70954","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/comments?post=70954"}],"version-history":[{"count":0,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/70954\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media\/70955"}],"wp:attachment":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media?parent=70954"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/categories?post=70954"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/tags?post=70954"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}