Global Fuel Prices Surge Past $2 in Montreal and $4.30 in US as Iran War Disrupts Supply

Key facts

• Montreal gas prices hit 205.0 cents per litre on Soucy Street in Longueuil on May 1, 2026.
• US national average gas price reached $4.30 per gallon on April 30, 2026, up from $3.99 a month earlier.
• North Carolina average gas price is $4.05 per gallon, up from $2.93 a year ago.
• Diesel national average is $5.57 per gallon, approaching the record $5.81 set in June 2022.
• The Strait of Hormuz closure and damaged oil infrastructure are key drivers of price increases.
• Moody's Analytics chief economist Mark Zandi says oil flows to the highest bidder globally.
• 40% of respondents in a Federal Reserve Bank of Dallas survey expect pre-war prices in 7+ months.

Montreal Stations Top $2 Per Litre Amid Ottawa Tax Pause

Gasoline prices in the Greater Montreal area have surged past the $2-per-litre threshold at multiple stations, with some locations charging as much as 205.0 cents per litre. Early Friday, stations on Parc Avenue in Montreal and Jacques-Cartier Boulevard in Longueuil posted 202.9 cents, while a station on Le Corbusier Boulevard in Laval reached 203.9 cents. The highest price recorded was 205.0 cents at a station on Soucy Street in Longueuil. Not all stations have crossed the $2 mark; prices remain lower at locations such as de la Côte-des-Neiges Road (191.9 cents), Pierrefonds Boulevard (199.9 cents), and Viau Boulevard (194.9 cents). The fluctuations come as Ottawa temporarily suspends the federal gas tax to ease pressure on drivers amid rising costs linked to the Iran conflict. Drivers can track prices using the Régie Essence Québec online tool.

US National Average Hits $4.30 as Iran War Stalls Peace Talks

In the United States, the national average price for a gallon of regular gasoline reached $4.30 as of April 30, according to the American Automobile Association. This marks a rise from $3.99 a month ago and $3.18 a year ago. Some states are seeing prices as high as $6 per gallon. The increase is the steepest since the early days of the Russia-Ukraine war in 2022, and prices are climbing as peace talks between Iran and the United States appear stalled. Despite the US importing only 8% of its oil from the Middle East, domestic prices are driven higher by global market forces. Mark Zandi, chief economist of Moody’s Analytics, explained that oil producers sell to the highest bidder on the international market. “So, oil literally flows to the highest price,” he said. James Cox, managing partner at Harris Financial Group, predicts high prices will persist until the end of 2026.

Damaged Infrastructure and Fragile Ceasefire Keep Supply Pinched

The war in Iran has disrupted oil supply through the closure of the Strait of Hormuz and damage to oil-industry infrastructure. A fragile ceasefire on April 8 has not alleviated the pressure. Kate Gordon, CEO of California Forward, noted that some infrastructure “will take years and years to rebuild.” Zandi added that there is “no going back to what we had, at least not this year.” Cox warned that even with a ceasefire, oil and gasoline prices will remain elevated for several months unless a new source comes online. The risk premium on oil shipments persists, as Zandi noted: “Insurance will rise on ships going through the Strait. There’s always a chance the ceasefire breaks and traders will want some premium to compensate for that risk.”

Economist Warns of Three-to-Five-Year Oil Shortages

Rob Handfield, a supply chain management professor at North Carolina State University, fears that high gas prices could last beyond 2026. “There’s a possibility this could actually last longer than 2026,” he said. “The fact is, a lot of the oil infrastructure was damaged during the war and it takes a long time to rebuild these facilities. We could be three to five years where we see oil shortages therefore, gas prices remain high.” A survey by the Federal Reserve Bank of Dallas found that 40% of respondents believe it will be seven or more months before pre-war prices return. Handfield’s outlook is even more pessimistic, citing the extensive damage to Middle Eastern oil facilities.

Diesel Prices Near Record Highs, Driving Up Consumer Costs

Diesel fuel prices are approaching record levels, with the national average at $5.57 per gallon, just shy of the June 2022 record of $5.81. Handfield emphasized that diesel is hit harder than gasoline, which is particularly tough for farmers and transportation providers. “The consumer ultimately pays for it because of the transportation surcharges, fuel surcharges and all the trucks in this country use diesel fuel to operate,” he said. These increased costs are passed on in the form of higher prices for groceries, sundry goods, and other products.

Outlook: Elevated Prices Likely Through 2026 and Beyond

The combination of damaged oil infrastructure, a fragile ceasefire, and global market dynamics suggests that high fuel prices will persist. Zandi and Cox both emphasize that the risk premium will remain for some time. Handfield’s projection of three to five years of oil shortages underscores the severity of the situation. Drivers in the US can use apps like GasBuddy and the WRAL Fuel Tracker to compare prices, while Montreal residents can consult Régie Essence Québec. However, these tools offer only short-term relief. The underlying structural damage to oil supply chains points to a prolonged period of elevated prices, affecting everything from commuting to the cost of goods.

The bottom line

• Montreal gas prices exceeded $2 per litre on May 1, 2026, with some stations at 205.0 cents.
• US national average gas price rose to $4.30 per gallon on April 30, up from $3.99 a month prior.
• Diesel prices near record highs at $5.57 per gallon, driving up costs for consumer goods.
• Damaged oil infrastructure in the Middle East may take years to rebuild, prolonging shortages.
• Experts predict elevated fuel prices through at least the end of 2026, possibly longer.
• A fragile ceasefire and stalled peace talks keep risk premiums on oil shipments high.