The recent airstrikes by the U.S. and Israel on Iran could significantly impact global oil markets, potentially driving up California’s already high gasoline prices.
While markets were expected to stay steady over the weekend, the aftermath of the attack raises concerns about disruptions to oil supplies from the Middle East in the coming week.
In California, motorists are facing additional challenges as some refineries have closed, leading to a decrease in local fuel supplies and an increased dependence on foreign imports.
The average price for a gallon of regular gasoline was $4.643 as of Saturday, which is up from $4.610 a week earlier and $4.260 a month ago, as reported by the American Automobile Association.
California Governor Gavin Newsom noted on Saturday that, “Average gas prices in California have been below $5 for nearly two years.” He added, “Trump’s new war is already disrupting markets,” following the first attack in Iran.
His comments follow a proposal by state Democrats for a mileage tax, which aims to replace the gas tax with a fee per mile driven, potentially costing drivers between $228 and $1,026 annually.
Clayton Siegle from the Center for Strategic and International Studies mentioned that if tensions escalate in Iran, oil prices might exceed $90 per barrel, and U.S. gasoline prices could surpass $3 per gallon.
Before the recent hostilities, experts suggested that any price hikes would likely be short-lived unless major oil transport routes or key infrastructure were compromised. However, if there are significant disruptions, prices could climb even higher and remain elevated for a longer period.
Fears related to the conflict have already driven oil prices up; on Friday, Brent crude reached a seven-month high, closing at $72.87.
Rystad Energy indicated that targeted attacks on Iran’s nuclear sites or military forces could push oil prices up by $5 to $10 a barrel purely based on market fears, even without a full-scale war or regime change.
Iran currently exports roughly 1.6 million barrels of crude oil daily, with most of its shipments going to China, due to U.S. sanctions that limit sales to other countries.
While American refineries don’t rely heavily on Iranian oil, they are still susceptible to rapid price changes and any shifts in global oil supply due to rising tensions.
