‘Hard to stomach’: Oil prices slump below Alberta’s budgeted barrel price amid economic uncertainty of Trump tariffs

As the price of oil falls, experts and the industry are bracing for what that will mean for Alberta and consumers. CTV News Edmonton's Chelan Skulski reports.

As oil hits a low not seen in years, and stock markets sink in response to U.S. President Donald Trump’s tariffs, experts and industry are bracing for what it might mean for Alberta and Albertans.

Finance Minister Nate Horner outlined Budget 2025 in February, warning of “evolving uncertainty with Canada-U.S. trade relations” and possible hard times ahead.

Alberta’s budget is based on oil at $68 a barrel and each dollar lost costs the province $750 million. With West Texas Intermediate (WTI) trading at $61 a barrel on Friday – the lowest since 2021 – those hard times appear to have arrived.

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“We saw oil prices decline quite dramatically in the wake of the tariffs that the U.S. administration has put in place,” said energy analyst Susan Bell, senior vice president of oil markets at Rystad Energy.

“If the tariffs do stay in place for an extended period of time, then it wouldn’t surprise me to see crude oil prices drop into the mid to high 50s.”

Bell said it’s hard to know, though, with Trump having “double-clutched” on tariffs a few times so far. That uncertainty, she added, is causing volatility in the market.

“The short-term pain and unpredictability right now is hard to stomach,” said Kevin Neveu, Precision Drilling president and CEO.

Neveu said low oil prices are already affecting production, and he worries what will happen if those prices persist.

“We’ll end up having rig workers without jobs for weeks or months,” he warned.

Bell agreed job losses could lie ahead should WTI fall into the $55 range. On the other hand, she said, falling oil prices could present a silver lining for consumers.

“When gasoline and diesel prices decline, it frees up more discretionary income in households to spend on other goods,” she said.

Lower fuel prices, coupled with the now-nixed consumer carbon tax, could also lower food prices – though Bell said shoppers are unlikely to see big savings if tariffs persist.

If they do continue, energy expert Richard Masson, School of Public Policy executive fellow, fears a recession may be imminent.

“President Trump put these tariffs on so many countries, investors didn’t believe this was actually going to happen, and so they all have to re-evaluate their level of risk tolerance,” Masson said, adding a recession would further tank slumping oil prices.

“Ten dollars in two days is a very extreme drop and it may not be over yet,” he added.

In a statement, Horner said the budget’s price for oil is a forecast for the whole fiscal year, rather than one moment in time.

“We are monitoring the situation and expect that oil prices will eventually stabilize,” Horner said.