"The price of oil is sitting around $100 US a barrel, but Tuesday's spring economic update used much lower prices to build the budget. For this year, the economic update assumes the price of the main North American benchmark West Texas Intermediate (WTI) will be just $73 a barrel this year."
"Current oil futures curves point to prices easing over the second half of 2026 and reaching about US$75 by year-end as crude oil exports through the Strait of Hormuz gradually resume."
"Even though the budget uses those lower oil prices as a building block, its authors say quite clearly that they expect the actual price per barrel will be higher."
The ongoing disruption in the Strait of Hormuz has led to oil prices around $100 per barrel, while the budget is based on a lower estimate of $73. This discrepancy creates a financial cushion for the government. The economic update relies on private-sector forecasts made before the escalation of the U.S.-Israel-Iran conflict, which has since removed 600 million barrels from the market. Despite using lower prices for budgeting, higher actual prices are anticipated, with expectations of averaging around $80 for the year.
Read at www.cbc.ca
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