Californian retail fuel prices have hit $6.114 per gallon for the first time since 2023 amid the global supply crunch that has exposed the state’s vulnerabilities, notably its dependence on foreign oil supply.
California sources close to a third of the crude oil it consumes from the Middle East. The last tanker carrying crude from the region arrived on the California coast at the end of April, delivering 2 million barrels, CBS reported. No other tankers will be arriving anytime soon, as traffic paralysis in the Strait of Hormuz continues. California already has the highest gas prices in the country, and they are about to go higher.
“It would probably lead to gasoline that rises from $6.50 to $7 a gallon,” GasBuddy’s Patrick De Haan told CBS. “It could lead to diesel that is approaching $8.50 or $9, and it could be restrictive for some airlines.” Like other analysts, DeHaan noted that even if the war ends tomorrow, prices will remain elevated for a while yet.
“That would put us at 64 weeks, which would put us, I believe, into June or July of 2027,” DeHaan said of California’s oil supply troubles. “There’s not really any magic to bite the bullet here. This is going to be painful,” he added.
California’s government has been actively working for years to decimate local oil production and refining, resulting in the shutdown of both oil wells and refineries, and an increase in the state’s dependence on imported hydrocarbons.
Now, the unforeseen consequences of these policies are making themselves known. At the beginning of the war, the average gasoline price in California was $4.64 a gallon. On Monday, it hit $6.114, according to AAA data, up from $6.101 per gallon on Friday and $5.949 per gallon a week ago. Some expect it could hit $10 per gallon.
By Irina Slav for Oilprice.com
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