Vehicle habits will likely linger in Alberta even as gas prices continue to rise: economist

CTV News Edmonton’s Connor Hogg speaks to Edmonton residents looking for the lowest gas prices around as most pumps rise above $1.60/L.

His crystal ball is murky given the war in Iran spearheaded by the United States and Israel is just three weeks old, but if the Middle East conflict is prolonged – dare we say most of the year – Moshe Lander says Albertans will have to reconsider their spending habits.

But the Alberta-based economist for Montreal’s Concordia University says he doesn’t necessarily think it’ll mean fewer trips to the gas station.

“I think that people are really committed to their cars,” Lander told CTV News Edmonton on Thursday. “They really feel that it’s an essential part of things. It’s almost like they’d rather skip their Tim Hortons run than the car itself.”

Lander said people haven’t yet seen their most-recent credit-card bills to know just how much more they’ve been paying for fuel ever since the U.S. and Israel started trading missile strikes with Iran.

The conflict has drawn in other oil-producing nations around the Persian Gulf and has essentially closed the region’s critical international oil-tanker route through the Strait of Hormuz, which is responsible for supplying 20 per cent of the world’s oil.

It has led to a significant jump in global crude prices and, by extension, fuel prices.

The benchmark price for crude oil in North America, the U.S. West Texas Intermediate, soared to almost US$120 per barrel early this month and has settled down to around US$100, about 50-per-cent higher than it was before the war started.

In Edmonton on Thursday, prices at the pump ranged from 139.9 cents per litre to as high as 163.9. Before the war began, they hovered around 108.9.

Lander says he doesn’t think the Strait of Hormuz will be opened “anytime soon” and that the destabilization of the region will have broad implications for its oil-and-gas sector.

“This could extend for most of 2026,” he said. “I don’t want to be a doomsayer and predict disaster, but it’s hard to see how this just goes back to business as usual on April 1. Even if the U.S. were to walk away right now, the damage has kind of been done.”

What he doesn’t see happening in Alberta is people rushing out to buy electric vehicles. He said changes in attitudes towards spending, if it comes to that, will be incremental.

“In the moment, people are going to certainly be frustrated, but to go buy an electric vehicle is not just the type of thing that you can do in the spur of the moment,” Lander said. “You actually have to be able to afford to buy an electric vehicle, and even if you want to put up your gas-powered car for sale today, there has to be somebody on the other side who wants to buy it who feels that still owning a gas-powered vehicle is better than an electric vehicle.

“This is the type of thing that the market’s going to take months to work its way through, and there has to be that tipping point that I don’t know that we’ve reached yet.”

With files from CTV News Edmonton’s Connor Hogg