The global benchmark climbed about 2.7 per cent, trading near US$100.57 a barrel for November delivery, ABC News reported. West Texas Intermediate, the U.S. benchmark, traded at about US$95 a barrel, up roughly 2 per cent.
The move followed a statement Tuesday by U.S. Central Command that its forces had destroyed five Islamic Revolutionary Guard Corps oil tankers, according to ABC News. The Revolutionary Guard responded by warning that all oil tankers in Kuwaiti and Bahraini waters should be evacuated. CNBC reported that Brent had already climbed toward the US$100 mark on Tuesday following attacks by Iran-aligned Houthi forces on multiple Saudi energy facilities.
For Canadian households, the number that matters is not the barrel price itself but what the central bank has said it will do about it. On Sept. 2, the Bank of Canada held its target for the overnight rate at 2.25 per cent, with the Bank Rate at 2.5 per cent and the deposit rate at 2.20 per cent. Its statement opened by naming the cause directly.
“The continuing conflict in the Middle East is keeping energy prices high,” the Bank said, adding that new U.S. tariffs and Canadian counter-measures had been announced following the breakdown of trade talks, and that both situations remained fluid.
The Bank was explicit about where the danger lies. “With the Middle East conflict still ongoing and little progress reopening the Strait of Hormuz, upside risks to the Bank’s inflation forecast have increased,” the statement said. “The longer that high oil prices and elevated refinery margins persist, the greater the risk of spillover to the prices of other goods and services.”
The figures behind that warning show how narrow the problem currently is. Consumer price inflation has been hovering around 3 per cent in recent months, the Bank said, mainly because of persistently higher gasoline prices. Strip gasoline out and inflation was 2.2 per cent in July, with measures of core inflation close to 2 per cent. In other words, almost the entire gap between the Bank’s 2 per cent target and the headline rate Canadians are living with traces back to the pump. A sustained move above US$100 pushes on the single component doing the most damage.
Canada’s exposure to a crude rally runs in two directions at once, which is why the effect is rarely uniform across the country. As a major oil exporter, higher world prices lift revenues for producers in Alberta, Saskatchewan and Newfoundland and Labrador, and support the currency. The Bank noted on Sept. 2 that the Canadian dollar had appreciated slightly, attributing that to U.S. dollar weakness. The same barrel price arrives at the retail level as a higher fuel bill for households and for every business that moves goods by truck.
The timing compounds an already crowded inflation picture. Canada’s counter-tariffs on roughly $27.6 billion of U.S. imports took effect Sept. 8, and the Bank cautioned that new U.S. tariffs and Canadian counter-tariffs “will also raise costs for some businesses and could feed into consumer prices over time.” That leaves two separate upward pressures on prices arriving in the same quarter, one from a war Ottawa has no influence over and one from a trade dispute it is actively engaged in.
What the Bank has not signalled is a response. Governing Council said it would assess the sustainability of the economic rebound and the outlook for inflation, and is prepared to adjust monetary policy as needed. Canadian economic activity strengthened in the second quarter, with GDP up 3.3 per cent, and the unemployment rate edged down to 6.4 per cent in July.
The next scheduled interest rate announcement is Oct. 28, when the Bank will also release its Monetary Policy Report. Whether crude holds above US$100 until then is unsettled. ABC News described the situation in the Gulf as a developing story.
Sources: ABC News (Kevin Shalvey, Sept. 9, 2026); CNBC (Sept. 8, 2026); Bank of Canada interest rate announcement and press release, Sept. 2, 2026.
