After falling to their lowest levels in nearly five years at the end of 2025, crude oil prices reversed course in early 2026. Prices climbed steadily through January and February before spiking in March as the conflict escalated. West Texas Intermediate (WTI) rose nearly 80% over the quarter, ending March above $100 US/BBL, while Brent crude increased over 100%, reflecting stronger exposure to seaborne supply disruptions.
Retail gasoline prices in Canada followed these movements closely. After ending December at 127.1 cents per litre, the lowest level since April 2021, prices rose through the quarter and peaked near the end of March at 184.8 cents per litre, the highest level since July 2022. Although pump prices started the year well below last year’s levels due to lower crude prices and reduced carbon taxes, they ended the quarter more than 19 cents per litre higher year over year as crude markets tightened.
Diesel prices experienced even stronger upward pressure. Global distillate markets were particularly impacted by the conflict, compounded by sanctions on Russian exports and high seasonal demand for home heating fuel. As a result, refining margins widened significantly. Retail diesel prices in Canada reached record daily highs in late March, peaking at 239.1 cents per litre, as diesel crack spreads climbed to unprecedented levels.
Price movements varied by region, with the largest increases seen along the West Coast. In Vancouver, gasoline prices rose more than 50 cents per litre from December to March, while diesel prices increased by roughly 76 cents per litre over the same period. Higher taxes, supply constraints, infrastructure limitations, and low‑carbon fuel standards all contributed to elevated prices in the region. In Eastern Canada, diesel prices also remained above the national average, reflecting the region’s heavy reliance on home heating fuel during the winter months.
Market outlook
Looking ahead, retail fuel prices are expected to trend lower over the next year as crude oil prices gradually ease and federal excise taxes are temporarily removed. However, prices are likely to remain elevated relative to last year, particularly if tanker traffic through the Strait of Hormuz continues to face disruption or if geopolitical risks escalate further. While gasoline prices typically peak in late spring or early summer, the combination of tax relief and recent price spikes suggests the peak may already have been reached for 2026.
Download the full report
For more detailed analysis, data tables, charts, and price forecasts, download the full Q1 2026 Petroleum Pricing Report from Kalibrate.
