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“Many have been surprised, somewhat, at how quickly prices have come back down the mountain,” Porter said, adding that if peace talks go smoothly, it’s possible prices could weaken significantly.

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“There is a view out there that prices could collapse, given that the world adjusted to this (conflict), and we came into it with a bit of an oversupply,” Porter said.

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Still, with many countries itching to refill their reserves, they may provide a cushion that props up demand, keeping prices elevated in the short term, according to Porter.

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Crude oil tankers, bulk carriers and vessels sit anchored around Qaboos Port on June 22, 2026 in Muscat, Oman. The Strait of Hormuz, a vital shipping route for the region’s oil and gas, was effectively blockaded since the outbreak of war between the United States and Iran in late February. This week’s provisional peace deal between the countries was meant to reopen the waterway to shipping traffic, but the pace of that reopening is unclear amid continued fighting in Lebanon and the need to clear the Strait of sea mines. Elke Scholiers/Getty Images

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While more ships have been able to traverse the strait in recent weeks, uncertainty remains. An Iranian vessel fired on a cargo ship in transit on Thursday, which put yet another obstacle in the way of restoring traffic to pre-war levels. The U.S. then struck Iran in retaliation on Friday.

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Birn, who watches oil markets closely, said prices could still go in either direction depending on the outcome of peace talks and whether the strait stays open.

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“If the tenuous peace falls apart and you get back into conflict, and then the strait closes, then you still get the case for a much higher price,” Birn said.

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Charles St-Arnaud, chief economist with Servus Credit Union in Alberta, said that with more signs of stability, countries will likely stop drawing on their reserves and start refilling them.

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“You should have base demand above what would be the normal demand from standard consumption, with that repiling of inventories,” St-Arnaud said.

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“I think we should be stabilizing roughly where we are, around $70 a barrel,” St-Arnaud said. “We could be slightly higher if we see faster stockpiling.”

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A lot of that, St-Arnaud says, depends on how fast China, whose crude imports fell dramatically during the conflict, rebuilds its reserves.

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Moshe Lander, a senior lecturer in economics at Concordia University in Montreal and an Alberta resident, said that while China’s demand may rebound, it may not reach the same levels as before.

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“If they decide that they’re going to shift away from oil, and they’re going to move towards renewables, that’s a big source of demand that’s coming out of the market,” Lander said.

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China could take the crisis as an opportunity to shift further towards electric vehicles, or shift its reliance on oil to other energy sources such as renewables, Lander said.

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While Porter doesn’t expect China’s demand to return immediately, it could come back in the weeks and months ahead.

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“Frankly, outside of China, I’m not sure anyone knows for sure,” Porter said. “They, obviously, are very strategic.”

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This story is part of Energy Aftershocks, a project by the Financial Post, in partnership with the Calgary Herald, Edmonton Journal, Saskatoon StarPhoenix and Vancouver Sun, that focuses on the ongoing fallout of the conflict in the Middle East. Watch this space for more stories about how the energy shock is echoing throughout Canada.

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