Gas prices drop on Iran-U.S. deal prospects

Canadian drivers caught a break this week as gas prices fell to about $1.76 per litre over the past 10 days, driven largely by optimism that Iran and the U.S. are nearing a deal to ease Middle East tensions.

But don't get too comfortable. Experts say predicting whether the relief will hold is a guessing game.

Behrouz Bakhtiari, an assistant professor of operations management at McMaster University, says the price drop hinges on whether a deal actually materializes. Without certainty, he said, forecasting near-term pump prices is too difficult.

Even if the conflict subsides soon, the recovery could take months. Roger McKnight, chief petroleum analyst at En-Pro International, warns that fuel inventories have been severely depleted during the Middle East war. Once suppliers can't dip into reserves any longer, crude oil, gasoline, jet fuel, and refined products will all be in short supply. McKnight estimates it could take four months before prices decline meaningfully.

Gas prices have surged in recent months as conflict blocked a key fuel passage along Iran's coast, but U.S. Vice-President JD Vance has suggested a resolution is "very close."

For now, Vancouver drivers should enjoy the current prices while they last.