As the conflict in the Middle East drags on, emergency oil reserves in many countries are beginning to run low – and that means we could be headed for a crunch in supply.
Gas prices shifted overnight, adding 3 and a half cents to a litre of gas, while diesel jumped by some 2 cents on the island and nearly 3 cents in Lab West.
The price of furnace oil also jumped by some 2 and a half cents, while stove oil in Labrador also nudged slightly up.
About one-fifth of the world’s oil goes through the Strait of Hormuz, but that shipping lane has been closed for the past three months.
Dan McTeague of Canadians for Affordable Energy told VOCM Open Line with Brian Callahan that he expects fuel to cost a lot more by the end of next month – over $2.00 a litre in Newfoundland and Labrador for gas and in the $2.40 range for diesel.
“The Hedge funds and all the traders on Wall Street are really rowing against the current here because the reality is that the world is short by 1.6-billion barrels. I would say we’re headed for a real shortage of oil and that’s going to happen over the next four weeks.”
