Summary
This technical report outlines the economic implications of the ongoing conflict in Iran, particularly its effects on global energy markets and oil prices. It details how the war has led to significant supply disruptions, causing Brent crude prices to peak at over $118 per barrel, before settling at $98 per barrel following a recent ceasefire. The report presents a revised oil forecast, predicting WTI to average $95 per barrel through Q2, with potential for further increases if the conflict escalates. It discusses the inflationary pressures resulting from rising energy prices, which have increased gasoline and diesel costs significantly. The report also examines central bank responses, indicating that both the Bank of Canada and the Federal Reserve may adjust their policies based on the evolving economic landscape. It emphasizes the uncertainty surrounding the duration of the conflict and its potential to impact economic growth and inflation expectations in both the U.S. and Canada.
