Alberta projects $2-billion surplus as Middle East conflict lifts oil prices
A fiscal update shows Alberta's finances reversing sharply as oil prices climb well above budget forecasts following the U.S.-Iran conflict. The province had expected a multibillion-dollar deficit just months ago.
Why it matters
Alberta's provincial budget remains heavily dependent on volatile global oil prices, meaning sudden swings can rapidly turn deficits into surpluses or vice versa.
Alberta's latest fiscal update forecasts a $2-billion surplus for the 2026 fiscal year, a dramatic shift from the $9.4-billion deficit projected in February's budget. The turnaround follows a surge in global oil prices tied to the U.S.-Iran conflict, which disrupted tanker traffic through the Strait of Hormuz.
When the province released its budget, it assumed West Texas Intermediate crude would average US$60.50 a barrel for the year. Since the conflict began just two days after the budget was tabled, WTI has averaged more than US$88 a barrel from April onward. Alberta's treasury gains roughly $680 million for every dollar increase in the average WTI price.
For the new surplus projection to hold, WTI would need to average US$65 a barrel for the remainder of the fiscal year, which ends next March. Officials also expect the same price gains to erase the $4.1-billion deficit originally projected for the 2025-26 fiscal year, though final year-end results for that period have been delayed.
Compiled by the Alberta Daily Desk — an AI-written summary of reporting from the credited sources below, produced and reviewed under our editorial policy.