‘We haven’t seen anything yet,’ Hodgson says of price spikes from Iran war

OTTAWA – The head of the International Energy Agency says the global energy crisis from the war in Iran will hit Canadians soon.

Fatih Birol, who was taking part in a fireside chat with Energy Minister Tim Hodgson in Ottawa on Tuesday, said while other countries are already struggling, Canada hasn’t yet been as hard hit as its allies.

“I think Canada is a bit insulated, if I may say, (of) what’s happening. In fact, big things are happening,” Birol said.

“Maybe it’s not your daily issue here. But it will be your daily issue, soon. I can tell.”

Hodgson pointed to agency modelling that he said suggests Canada’s allies are weeks away from having to “shut down operations” because of a lack of energy. The minister also signalled the world may face additional price shocks if the war in Iran drags on.

“Now, I think in this country, we’re a little better off,” Hodgson said.

“But we’ll have a price impact, for sure. We’ve already seen — we haven’t seen anything yet — if we don’t get this situation under control.”

While some in attendance understood Hodgson’s comments to mean he was signalling that prices would rise domestically, the minister’s office told The Canadian Press after the event that he was referring to Canada’s allies.

“Canadians should know that while the volatility we are seeing in the Strait of Hormuz is being felt worldwide, Canada is in an extremely strong and resilient position,” Hodgson said in a statement through his office after the event.

“As the situation in the Middle East evolves, the federal government will continue to monitor the situation and will respond with measures to support affordability, because Canadians shouldn’t pay for something they didn’t cause.”

Last month, the federal government announced it was temporarily suspending the excise fuel tax to help Canadians weather the spike in fuel prices from the war in Iran.

Birol called the energy crisis from the war in Iran the worst the world has ever seen. He explained how the previous crises in 1973 and 1979 lost a combined 10 million of barrels per day.

“And in this crisis, we already lost 14 million barrels per day,” Birol said. “So, much more than two of the oil crisis put together.”

He also said the energy crisis right now has already lost more natural gas availability than when Russia cut off the flow of natural gas to Europe in 2022.

“It is not only oil and gas. It is also fertilizers, petrochemicals, helium, sulphur,” Birol said.

“We will understand how important they are in our daily lives in a couple months’ time.”

Oil tankers in the Persian Gulf have for months been unable to safely pass through the Strait of Hormuz to reach global distribution points. Nor have Iranian oil exports, due to a U.S. blockade. Normally, about a fifth of the world’s oil and liquefied natural gas transits the waterway.

With no way to export the oil it is pumping out and diminishing room to store it at home, experts say Iran may be forced to dramatically reduce or cease production from some of its wells, perhaps beginning in as little as two weeks.

Tuesday’s fireside chat came as five of Canada’s largest oilsands producers and clean energy groups separately criticized the federal and Alberta governments this week for slow progress on finalizing aspects of an energy deal signed last year.

The pact pairs the prospect of a new oil pipeline to the West Coast with several environmental measures, including industrial carbon pricing and an agreement for reducing methane emissions.

In a statement published Monday, the Oil Sands Alliance — formerly known as the Pathways Alliance — said the deal was a good first step, but progress has been too slow.

“Global events over the past few months highlight the importance of affordable, reliable energy in people’s lives and to the health and well-being of national economies, including Canada’s,” the oilsands producers wrote.

“We are at risk of letting this opportunity pass Canada by. Because of complex regulatory processes, uncompetitive carbon frameworks and fiscal systems that do not incent growth, there has not been a major new greenfield oilsands project sanctioned in Canada since 2013 and investment has dramatically declined.”

But Birol said Tuesday the war in Iran will have global economic implications, which Canada is not sheltered from.

“If Canada’s future or current customers are economically weak, their ability and appetite to buy energy or other things will be weaker,” Birol said.

“So I believe if this crisis continues this way, it will weaken global economic growth, and every country will be affected by that.”

In their own letter Tuesday, the heads of six climate groups called on Prime Minister Mark Carney to deliver on policies that “will scale domestic clean energy solutions, reduce emissions and set Canada up for economic success in a rapidly decarbonizing world” while other countries scramble to pivot to new oil suppliers.

“Now more than ever, we are seeing governments simultaneously expedite their plans to scale up clean energy solutions — such as building wind and solar energy projects, or shifting as much transportation as possible to electric vehicles — in order to shield their populations from future oil and gas supply shocks,” the leaders wrote. 

“In other words, those in Canada who continue to argue that the war presents an opportunity to expand Canada’s oil and gas exports, including to new Asian markets, are making a consequential miscalculation.”

This report by The Canadian Press was first published May 5, 2026.

— With files from The Associated Press