The world is anxious these days over the price of gasoline. What else is new? It has thus been ever so. The world has for some time now been shaped by the price of a barrel of oil. Write all you want about wind power and solar power and all the new-age ways of making things work. The truth is that the world still is running on oil. Everything flows downhill from there. Oil was a critical and strategic resource in World War II. It shaped the war and its result. It dictated military strategy, limiting the mobility of the Axis powers and in the end was a critical factor in the Allies victory. They had oil.
It is a fact of history that the United States controlled the vast majority of oil production. Both Germany and Japan suffered throughout the war from fuel shortages. That made oil infrastructure a target for strategic bombing and that is what happened.
Fast forward to 2026 and we see all the issues in the Iran-United States conflict being reduced into controlling the flow of tankers and oil through the Straits of Hermuz. As we know here in Canada there is extreme upward pressure on the price of gasoline these days. It is driven by conflict and uncertainty right now and we see the price of gas moving quickly upward. The question to be answered is where does this all lead.
I am luckier than most people because I am old and mostly retired from the daily workforce. I live about 20 kilometres from my office here at NTV. It is nearly a 50-kilometre round trip, but I don’t have to come every day. I cut down on my trips but stay longer when I am here. That makes sense. I am usually in three or four days a week, but when the price of gas goes up well, I don’t drive so much. I cut down the number of visits because gas is bloody expensive.
Until recently I drove an eight-cylinder pickup truck. It was great. I could carry a pretty fair load on board from a snowblower to birch junks, but it cost money. Even an empty eight-cylinder pickup was a $15 to $20 round trip to St. John’s and that is only if I stayed on the highway and didn’t wander around downtown. I sold the truck and now I have a little four-cylinder car with not much power, but it just sips gas. It works.
Gas was always an issue ever since I was a young man which was an exceptionally long time ago. The cheapest I remember gas prices was at a time when in Toronto it was 25 cents a gallon. That was around 1961. My first car was a 1952 Chev, and someone asked me how many miles I got to the gallon. I answered that I never actually ever had a WHOLE gallon. It was a funny line.
The latest oil crisis is going to change the world. Consider the airlines. The price of jet fuel is up but the problem is airlines can’t do much in terms of raising prices in some areas. For instance, the tickets for this summer’s vacations are already sold. They are bought and paid for. I don’t have to tell you that food costs are up. If it isn’t just the product themselves, it is the cost of getting those items to market and the cost of running the stores that sell those goods to you. Look at the price of a two piece fish and chips. Look at the cost of any and all foods.
Where is the good news? Well, we are in the oil business, Canada in the broad sense but in the narrower sense Newfoundland and Labrador. We have oil and the world very desperately needs oil. That is critical to decisions on new offshore projects like the Bay Du Nord in the Flemish Pass. and whether or not they move forward. Our long-term prospects are quite good.
You can contact Jim Furlong at jfurlong@ntv.ca