New Report Shows Speculative Oil Markets Drove Inflation Crisis — And It’s Poised to Happen Again

A new report from the Centre for Future Work reveals that financial speculation in global oil markets — not supply shortages or carbon pricing — was the primary driver of Canada’s inflation surge in 2022. The report, Counting the Costs, finds that inflated oil and gas prices, passed directly and indirectly to Canadian consumers and businesses, cost each household an average of $12,000 over three years.

Furthermore, the report warns that without urgent action, this will happen again, especially as geopolitical instability — like Donald Trump’s erratic threats of tariffs — creates the conditions for another speculative oil price surge.

The report proposes three policy recommendations to prevent a similar macroeconomic shock in the future from volatile futures markets:

1. Insulate Canadian fossil fuel prices from the gyrations of financialized futures markets.
2. Strengthen royalty regimes and collect excess profits taxes when oil and gas companies profit from future price spikes, redistributed to compensate consumers for extra costs.
3. Accelerate energy conservation and the transition to renewable energy systems (which are not in the thrall of futures market speculation).

This report is the first publication from a new project, False Profits, hosted at the Centre for Future Work. The project will investigate how fossil fuel prices and profits have contributed to affordability challenges and economic insecurity for Canadians.

Please see the full report, Counting the Costs—Impacts of the 2022 Oil Price Shock for Canadian Consumers and Workers, by Jim Stanford and Erin Weir.