Canada's wildfires shut down oil production and threaten U.S. gas prices

As of June 2, 2025, Canada is experiencing significant wildfires, particularly in Alberta and British Columbia, leading to severe disruptions in its oil production. Currently, there are around 189 active fires being reported, with approximately 350,000 barrels of daily heavy crude oil production halted, equating to about 7 percent of the country’s total output. Due to these disruptions, concerns are emerging regarding the potential impact on gasoline prices in the United States, where a considerable portion of crude oil is imported from Canada. According to Patrick De Haan, head of petroleum analysis at GasBuddy, if these production shutdowns continue beyond a couple of weeks, the impact on U.S. refineries could become more pronounced. Refineries in the Midwest and Rocky Mountains, which rely heavily on Canadian crude, might struggle with a diminished supply, despite having a buffer of stored crude oil for several days. As of now, the average gas price in the U.S. stands at $3.09 per gallon, but the ongoing situation with wildfires is leading to uncertainties surrounding future price adjustments. It is also noted that Cenovus Energy and other producers, indicating a serious concern within the industry, have temporarily ceased operations in response to this crisis. Furthermore, the fires have displaced thousands from their homes and worsened air quality across multiple U.S. states, amplifying the overall public health concerns. If the flow of oil does not resume quickly, this situation could lead to important economic ramifications, particularly for consumers who rely on stable gasoline prices.