A Sequel We Don’t Want: What the 2026 Oil Price Shock Will Cost Canadians.

The war in the Persian Gulf has caused the biggest disruption in oil supply in world history, and is driving up costs and inflation around the world – including in Canada.

New research from the Centre for Future Work, published through the False Profits project, shows how damaging this latest oil shock will be for affordability and inflation in Canada. It also proposes policies to protect consumers and workers.

The numbers are grim: The report predicts $50 billion in additional consumer costs over a 12-month period, and inflation jumping to 4.2%, even if the conflict ended and the Strait of Hormuz reopens tomorrow.

If the Strait remains closed for longer, the impacts on consumers will be much worse. Three months of additional closure would double the hit to Canadian consumers (to $100 billion), and push Canadian inflation to 6.9%.

The study also estimates the windfall revenue gains flowing to Canada’s petroleum industry from the war. Upstream oil revenue will soar by $65 billion over 12 months, even if the Strait reopens immediately. Under a longer closure, the industry’s revenue would increase by up to $155 billion, reaching almost $400 billion in total over the 12-month period.

The report advocates measures to stabilize oil prices within Canada (since Canada produces almost three times as much oil as it consumes, and production costs at home are unaffected by the Persian Gulf conflict), redistribute record petroleum profits back to consumers, and accelerate the transition to renewable energy sources.

Please see the full report, A Sequel We Don’t Want: What the 2026 Oil Price Shock Will Cost Canadians.