Tariffs and Trade Updates and Information, visit www.chambercheck.ca
Tariffs and Trade Updates and Information, visit www.chambercheck.ca
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The following column by Cambridge Chamber of Commerce President & CEO Greg Durocher appears in the summer edition of our INSIGHT Magazine.
There are many things in this world that we have trouble understanding, and as frustrating as it may be, much of it has to do with politics.
I can bet everyone reading this is having the same struggles as I am when it comes to finding the cheapest place to buy gas. Funny, ‘GasBuddy’ is my favourite app right now, and I’ve found that evenings are the best time to fill up. We have seen the price vary from $189.9 per litre down to as low as $152.9 per litre in the same day. How does that happen, and why does that happen?
Well, we all know that oil is a commodity, and we know that commodities fluctuate (usually over the course of a week or month or even months), but lately the price of oil spikes, drops, surges and flutters virtually every single day.
Many people blame the gas stations themselves because the price differences can be very wide. Others may blame the oil companies because they do have a part to play.
Frankly, since this is a commodity, you should really blame the investors who jump in heavy one day and opt out quickly the next. It’s about investors willingness to invest or not that has much to do with it, but more importantly, it is about the market itself. Always remember the economic model, ‘supply and demand’.
Political in nature
While oil prices have inched up over the years, most of it is political in nature. During U.S. President Donald Trump’s first term he encouraged OPEC (Organization of the Petroleum Exporting Countries) to increase the production of oil, which brought the prices down, but that was just a sleight of hand exercise because what happened next was a dramatic reduction thanks to demand slippage during COVID and it pushed the prices higher. Remember, producers don’t want cheap oil because they can’t make money.
Back in late 2025 the baseline for oil was about $50 USD per barrel, that is the line in which it is still reasonable to make money which is very bad news for Canada’s oil producers because the cost for us is a little more and we dramatically discount the oil we sell to the U.S. The producers draw that line in the sand so they can ensure their production is profitable, and they watch to ensure the balance of supply and demand doesn’t get too close to the baseline.
As we all know, the U.S. started a “conflict” (their word, mine is a war), with Iran, after bombing its nuclear production facilities in July of 2025, claiming they obliterated their ability to develop a nuclear bomb.
None of the experts really understand what was going on, other than Israel was in a battle in Gaza with Hezbollah which were combatants that were funded and proxied via Iran. It’s a very complicated situation and extremely political with average everyday citizens in most countries not supporting any of these conflicts, only the political leaders.
Oil a global commodity
Confused yet? What does this have to do with oil? Well, the Iranians have an ace up their sleeves since they can block up to 20% of the world’s oil supply, virtually shutting down economies, which they did. When you have that kind of power, you don’t need many bombs. Remember, oil is a global commodity so when one area of the world gets shut down, especially when it supplies 20% of the world’s need, prices skyrocket.
Now, no one says the U.S. was too stupid to understand that when they started the war, but they clearly underestimated the capacity of Iran. As it stands, if the Strait of Hormuz remains closed as you read this, we will have ridiculously high prices, and the longer it stays closed the longer the prices will stay high, because it will take months to catch the system back up.
You see, most countries are using their oil reserves, which are held for catastrophic shortages just like this. So not only does normal production have to catch up, reserves also need to be replenished.
Folks, this is a big problem, without short-term solutions. In fact, oil companies, in particular OPEC, have now increased the baseline from about $50 USD per barrel to $70 or so, which means oil will remain high at least until the end of 2027. Yes, they will come down if this so-called “conflict” officially ends soon, and slowly drop, but we may never see the prices at the pump that we had before this crisis. This is yet another thing we can “thank” the U.S. for.
Folks, this is what happens when a tyrant (a.k.a. Donald Trump) gets elected and this is what it looks like when a person largely uneducated on what it takes to run an economy comes into power.
The world is upside down in many areas, not to mention the relationship we have with Americans, and all of it lands squarely on the shoulders of the President of the United States. When you give a bully the keys to a muscle car, don’t expect there won’t be any traffic violations.
Hopefully we’ll see better results in the fall. Until then, keep an eye on your GasBuddy app, and fill up in the evenings. I’ll probably see you there. |
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Brian Rodnick 305 July 13, 2026 |
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Greg Durocher 41 July 28, 2023 |
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Canadian Chamber of Commerce 24 January 29, 2021 |
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Cambridge Chamber 2 March 27, 2020 |
750 Hespeler Road Cambridge, ON N3H 5L8
Phone: 519-622-2221
Fax: 519-622-0177
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