California’s average gasoline price surged to above $6 per gallon on Thursday, the first U.S. state to top this threshold since the Iran war rattled markets.
The U.S. benchmark crude price, WTI Crude, had jumped to $106 per barrel in Asian trade on Thursday, driving sustained increases in U.S. gasoline prices—a political hot potato for the Trump Administration ahead of the midterm elections in November.
Crude oil prices have rallied in recent days amid fears of a prolonged U.S. blockade outside the Strait of Hormuz and reports of potential escalation of the war.
At the beginning of the war, the average gasoline price in California was $4.64 a gallon. Today, it’s $6.01, data from the American Automobile Association (AAA) showed.
The average U.S. retail price of a gallon of regular gasoline has surged to $4.30 as of early on Thursday, up from $3.99 a month ago and $3.183 per gallon a year ago.
The average U.S. gasoline price is now at its highest level since July 2022, according to live GasBuddy data, Patrick De Haan, Head of Petroleum Analysis at the fuel-savings app said.
Prices have surged by about 28% since the war in Iran began and the Strait of Hormuz was closed.
In California, where prices have always been higher than the national average, the record for a gallon of regular gasoline was set in June 2022, during the previous oil price spike in the early months of the Russian invasion of Ukraine. The record high for California was $6.438 per gallon of regular gasoline seen in June 2022.
Nationwide, the record was also set in June 2022, when a gallon of regular gasoline at retail sites topped $5 and was $5.016 on June 14, 2022.
Gasoline prices have not hit yet the records seen in 2022, but the surge this time has been very steep as global oil and fuel supply has tightened sharply. U.S. gasoline prices are set on the global market, with crude prices carrying the most weight in gasoline pricing.
By Charles Kennedy for Oilprice.com
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