The conflict in Iran has impacted California gasoline prices due to a disruption of global crude supplies. Attacks in the region and disruptions to shipping traffic in the Strait of Hormuz removed millions of barrels per day from the international oil market, pushing crude prices sharply higher. Gasoline prices at the pump here in California and around the world are heavily influenced by the global price of crude oil – the single most important factor for the price of a gallon of gasoline.
As a result, gas prices around the world increased. California’s average retail gasoline price peaked just above $6.00/gallon, but the price-per-gallon increase was roughly the same as most other states.
The current price behavior has been similar to what we saw when the Russia-Ukraine war started in February 2022, when geopolitical uncertainty also sent crude prices spiking. However, in-state factors, namely refinery outages contracting supply, contributed to the extreme price spikes seen in 2022 and 2023. Contractions in supply can result in California oil companies increasing their profit margins.
As California prices increased significantly over the national average in 2022 and 2023, the Governor and lawmakers set out to protect consumers. To address the price spikes caused by local events, California passed a series of laws in 2023 and 2024 that increased data transparency and industry collaboration and established a new independent oversight division within the CEC.
These laws helped stabilize gas prices in California, even amid major unplanned refinery outages that occurred in February and October 2025. And despite prices elevated by the Iran War, these laws continue to help keep price increases aligned with the national average, unlike the spikes experienced in the fall of 2022 and 2023.
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January 2026
California fuel market opens year on stable footing
Retail gasoline prices were in line with prior-year prices. California refiners were preparing for the seasonal transition to summer-blend fuel.
Early February 2026
Summer blend transition and refinery outages
As refiners switched from winter to summer blend gasoline — required in California each year to reduce evaporative emissions from tailpipes and combat smog — they emptied storage tanks and refilled with the new formulation. This predictable seasonal process, along with planned and unplanned refinery outages, tightened supply and elevated retail prices at the beginning of February, independent of geopolitical factors.
February 28, 2026
Iran Conflict begins - Strait of Hormuz threatened
The Iran conflict commenced, and shipping through the Strait of Hormuz was immediately curtailed. Prior to the conflict, in 2025, approximately 17% of California's internationally sourced crude oil transited the Strait. At this time, California had a healthy supply of gasoline, providing initial buffer time for industry and regulators to assess and respond.
March 2026
Global crude markets add risk premium; CEC activates response team
An immediate risk premium was added to crude prices. A risk premium is an additional cost that reflects risk of future supply disruption. The CEC mobilized in-house experts to monitor the situation daily. The Division of Petroleum Market Oversight (DPMO) also stepped up its daily market monitoring and issued an enforcement bulletin and consumer advisory.
March - April 2026
Alternative routes and supply sources established
The market begins adapting. California importers and refiners sourced additional crude from Latin America, Canada, and other non-conflict regions. Alternative shipping routes around the Strait opened, which further mitigated the impacts of the disruption.
April - May 2026
Prices continue rising as crude premium persists
Elevated crude prices, driven by sustained geopolitical risk premiums, continued to increase California’s gas prices.
May 22, 2026 - Present
Continuous monitoring; supply flowing
Gasoline and crude continue flowing to California through local production, refining, and alternative supply routes. The CEC maintains daily demand-supply balance assessments, refinery production tracking, and close engagement with refiners, the Independent Consumer Fuels Advisory Committee, Western States Petroleum Association, and academic partners at UC Davis and UC Berkeley. DPMO continues its daily market monitoring and oversight work.
June 17, 2026 – Present
Strait reopens
The United States reached a ceasefire agreement with Iran and conditions to open the Strait of Hormuz. Prices of crude immediately fell and prices at the pump began their descent, though risk premium remains.
Last updated: June 30, 2026
The Strait of Hormuz is a narrow waterway between Iran and Oman connecting the Persian Gulf to the open ocean. Before the Iran conflict started February 28, 2026, roughly 20% of the world's daily oil supply transited this chokepoint. Prior to the start of the war, California sourced approximately 17% of its total crude oil (which is 29% of its internationally imported crude) via the Strait.
Last updated: June 30, 2026
Like the rest of the world, California gas prices rose sharply as a direct result of the war in Iran, which restricted flow of about 20% of the world’s crude oil supply through the Strait of Hormuz – a narrow and vital shipping waterway carrying Middle Eastern oil – since February 28.
Crude oil prices are influenced by a combination of complex factors including global supply and demand. Prices at the pump have gone up in every state, including states that produce oil and states that have zero refineries — that's because oil, whether domestically or internationally sourced, is driven by global prices.
In the weeks after the invasion, sources of crude oil and shipping routes for crude shifted and the market adjusted to the Strait’s effective closure. However, continued uncertainty and volatility in the global market added a geopolitical risk premium — an additional cost that reflects risk of future supply disruption — to the price of crude.
While prices at the pump have eased some, consumers in California and around the world will continue to feel the impact of the risk premium as long as geopolitical uncertainty persists.
Last updated: June 30, 2026
Brent crude is the global benchmark price for oil, established daily on international commodity markets. Because crude oil is globally traded, supply disruptions anywhere — including the Strait of Hormuz — affect the Brent price. California refiners purchase crude on these global markets, so a Brent increase flows directly into what refiners pay for raw material and ultimately into retail gasoline prices. Every $10/barrel increase in crude translates to a roughly 24 cent/gallon increase at the pump, which is why prices increased in Texas, Oklahoma, and every oil-producing state in America.
Last updated: June 30, 2026
Filling up the tank in California costs more on average than other parts of the United States due to 1) the isolated nature of the state’s transportation fuels market, 2) a special gasoline blend that reduces air pollution, 3) environmental program fees, and 4) local and state taxes (though most places have some state and/or local taxes). See a breakdown of California costs. When looking at the breakdown of costs for gasoline, it should be noted that refining margin, distribution margin, crude oil cost, federal excise tax, state excise tax, and state/local sales tax are costs that everyone in every state pays — though the amounts vary across each state. State taxes on California gasoline remain relatively stable, annually adjusted to inflation every July, and are reinvested in California to fund road repairs, highway maintenance, bridge safety, public transit, and bicycle and pedestrian projects.
About 7-10% of California’s total cost of gasoline supports California-specific programs aimed at clean air and climate resilience initiatives. These fees include: the Low Carbon Fuel Standard (18 cents or ~3%) and Cap and Invest (23 cents or ~4%). These programs have successfully reduced tailpipe emissions that impact public health. And these programs are vital to stemming the impacts of climate change, including costly wildfires, extreme heat, and flooding.
Last updated: June 30, 2026
No. This chart shows the increase in gas prices in California (blue line) and the national range of increases from across all states (light blue area) since the beginning of the Iran War. What we see is that the increase in California gas prices is in line with what is happening across the nation. CEC will update this chart weekly.
Last updated: June 30, 2026
No. The CEC is in close communication with all in-state refiners about transportation fuels supply during this volatile period of supply contraction due to the effective closing of the Strait of Hormuz, through which one-fifth of the world’s oil supply passes. In-state refiners are sourcing imported crude from alternative sources to offset the impact of lost Middle East cargoes.
California’s gasoline needs are being met through a combination of refinery production, inventories, and imports from various sources, and the state is tracking conditions in real time to support fuel market stability.
The CEC can reliably forecast supply for the next six weeks, and we have sufficient supply to meet demand under normal operating conditions, assuming no major unplanned outages. The CEC remains cautiously optimistic about the supply forecast beyond the six-week window.
Given the highly dynamic and fluid nature of the current global oil disruption, six weeks reflects the outer limit of what can be reliably forecasted. Not unlike weather forecasting, there is a finite window of forecasting based on available data and its reliability.
Last updated: June 30, 2026
California continues to receive crude oil and gasoline imports from both domestic and global sources. Most transportation fuels are refined in-state. Domestic imports of fuel, including gasoline, are arriving from the Pacific Northwest, U.S. Gulf Coast, and East Coast. Internationally, California imports fuel from India, United Kingdom, and South Korea. California refiners continue to receive crude oil from California, Alaska, Canada, South America, and other regions. For more information, see sources of crude to California refiners and foreign sources of crude to California refiners.
Last updated: June 30, 2026
California has maintained a healthy inventory position since the conflict started. The inventories shown on CEC’s Weekly Fuels Watch only show inventory at refinery facilities, but California holds more than double that amount. PADD-5 inventories are one indicator of healthy storage. PADD 5 gasoline stocks were at 10-year historical lows mid-May to early June but are climbing to typical summer levels.
Last updated: June 30, 2026
PADD-5 (Petroleum Administration for Defense District 5) covers the western United States: California, Oregon, Washington, Nevada, and Alaska. Because the West Coast fuel market is largely isolated from the rest of the U.S. pipeline network, PADD-5 regional inventory levels are a critical indicator of local supply conditions.
Last updated: June 30, 2026
The duration of supply and price impacts depends primarily on the trajectory of the Iran conflict — particularly whether the Strait of Hormuz remains disrupted to commercial shipping. California's diversified supply base and healthy initial inventory position have absorbed much of the immediate shock. Alternative routes and sources are active.
Last updated: June 30, 2026
The CEC regularly assesses and reports out on the margins, or profits, of refiners in California, as required by SB 1322.
It is typical to see seasonal increases in margins in the spring due to refineries shifting to the summer blend, and current industry gross margins based on the latest data (April 2026) submitted to the CEC are within the range of prior years.
As an independent division of the CEC, the Division of Petroleum Market Oversight is responsible for flagging market structure or design flaws that harm consumers, including matters that may be investigated or referred to for prosecution (such as criminal price gouging or market manipulation).
Last updated: June 30, 2026
On March 19, 2026, the Division of Petroleum Market Oversight (DPMO) issued an enforcement bulletin and consumer advisory notifying market participants that it was closely monitoring the refining, wholesale, and retail market segments to ensure that firms do not opportunistically raise prices in a manner that is disproportionate to changes in their own input costs. DPMO also encouraged consumers to shop around for gasoline, noting that all gasoline (including branded gasoline) meets California gasoline specifications, including additive requirements.
On June 12, DPMO issued a market update amid rising gas prices due to the Iran conflict. They found that increases in California have been consistent with price increases in the rest of the U.S.; however, this conflict has emphasized the unique and growing difference between branded and unbranded retail gas prices in California.
When DPMO identifies instances of pricing that appear to be excessive and disproportionate to increases in those sellers’ costs, their investigative team reaches out through written correspondence and interviews to determine the facts around those sellers’ pricing, which is the essential first step in the investigative process. Since the launch of the war with Iran, they have contacted a number of station owners that meet targeted criteria for oversight attention. This work is ongoing.
Last updated: June 30, 2026
Every state pays some amount of tax on its gasoline. Taxes on California gasoline remain stable, indexed to inflation, and are reinvested in California to fund necessary road repairs, highway maintenance, bridge safety, public transit, bicycle and pedestrian projects. The federal gas tax, on the other hand, is a fixed cost, $0.18, that hasn’t been increased since 1993. As the purchasing power of the federal gas tax has declined over time, state and local taxes must fill the gap in federal transportation revenue.
Suspending the gas tax may sound like it would offer short-term relief, but it could also cause longer-term impacts to drivers by disrupting current and planned transportation and safety projects. Gas station owners are not required to pass any tax reduction on to consumers and may choose not to. Studies have found that tax reductions are not fully passed through to consumers during times of high retail fuel prices or supply chain constraints (Tsvetanov 2024, Marion and Muehlegger 2011).
Last updated: June 30, 2026
Californians have historically suffered from some of the worst air pollution in the nation. Voters have repeatedly passed laws to curtail impacts from the leading cause of that pollution – the transportation sector – through taxes and programs to improve air quality. Our unique blend of gasoline, known as CARBOB, burns cleaner, thereby reducing air pollution, while also cleaning the car’s engine.
Before the weather heats up in California, in-state refiners transition to the state’s summer blend of gasoline, which burns cleaner than what the state uses in the winter. Warmer weather causes gas pollutants to form more ozone, a major contributor to smog. California’s summer blend minimizes the formation of unhealthy smog.
The cost to make California’s summer blend of gasoline is higher than its winter blend. When the fuel transition begins, starting in February or March, supply tightens a bit as refiners wind down winter supply and commence summer blend production. The tightening of supply can exert some upward pressure on prices and also briefly elevate refiner margins, which tend to rise when supply contracts.
Senate Bill 237, signed by Governor Newsom in September 2025, authorizes the Governor, in consultation with the California Air Resources Board (CARB) and CEC, to suspend California’s seasonal gasoline blend requirements for a limited time if determined necessary to protect consumers from price spikes and unlikely to yield unintended consequences. The bill also directs the CEC, in coordination with CARB, to evaluate alternative fuel specifications and a westwide gasoline specification as part of the next Transportation Fuels Assessment.
At this time, the CEC doesn’t believe that suspending the summer blend would offer a meaningful supply boost that would lower prices enough to justify the negative air quality and health impacts.
Last updated: June 30, 2026
Passed in 2023, Senate Bill X1-2 (SB X1-2) provided the CEC with a set of tools to bring more transparency to the California transportation fuels market and allowed the CEC to set a maximum gross gasoline refining margin (GGRM) and a penalty for refiners that exceed it, if the CEC found that the potential consumer benefits of a maximum GGRM outweighed the potential consumer costs. Assembly Bill X2-1 (AB X2-1) was passed in 2024 and expanded the state’s petroleum market oversight framework by giving the CEC authority to regulate refinery fuel inventories and maintenance planning to reduce price spikes. That legislation allows the CEC to require refiners to maintain minimum fuel inventories and develop resupply plans during refinery maintenance or outages.
In August of 2025, after conducting analysis and public outreach, the CEC voted to deprioritize the GGRM and penalty in favor of a holistic evaluation of supply stabilization strategies, including the AB X2-1 tools. The CEC kicked off an informational proceeding concerning mid-transition petroleum supply stabilization strategies in September 2025. A Transportation Fuels Reliability Workshop with a focus on resupply for planned refinery maintenance was held in June. The impacts and potential framework for minimum inventory are currently being assessed.
With the new transparency into the petroleum industry granted by these special session laws, and based on California refinery events and global events, CEC is gaining valuable perspective on forces shaping the market and what can and cannot be mitigated for.
Last updated: June 30, 2026
Unfortunately, very little can help soften the blow of a global supply disruption of this proportion. Many experts agree that minimum inventory and resupply efforts are intended to support anticipated local outages, not global supply disruptions and historic price volatility.
That doesn’t mean that California can’t be proactive for future unplanned events. Efforts to increase storage, pipelines, and port capacity are worthy endeavors to build resilience into the system.
Long term, it is widely believed that accelerating electrification of the transportation sector is the best insurance against future price spikes.
Last updated: June 30, 2026
It is true that utilizing California crude oil can make the state less reliant on foreign crude oil imports. However, it takes time to open new wells, procure drilling equipment, and begin operations – it takes months, not days.
Last year, the Governor signed SB 237 to increase permit issuance for oil production in Kern County. Since January 1st, Kern County has issued 385 permits for various types of well work, and CalGEM has issued 138 permits to drill new oil and gas wells, which are all under strengthened safety requirements and enhanced protections to safeguard communities from oil and gas operations.
Despite the current global oil disruption, increasing supply in California will not necessarily lower gas prices, because oil trades at a worldwide price. American crude sells at the global price, which has been sharply elevated by the conflict. Similarly, restarting offshore drilling and the Sable pipeline will have minimal impact on California gas prices.
Last updated: June 30, 2026
Demand for gasoline is declining. California’s peak demand for transportation fossil fuels occurred in 2004. In 2024, gasoline demand was down 16 percent, resulting in significant reductions in air pollution.
The pandemic significantly accelerated a decline in demand. Furthermore, California’s promotion of zero-emission vehicles is working. With more than 2.5 million new zero-emission vehicles sold in California, the transition to cleaner transportation is inevitable. Refining petroleum is also an expensive endeavor, requiring frequent maintenance on massive infrastructure to ensure worker safety. Over the past couple of decades, refineries across the state have closed or converted their operations based on business priorities – a trend that is playing out globally.
The CEC is working closely with refiners, communities, labor groups, state and local agencies, and other stakeholders to advance a clean transportation transition strategy that protects consumers, workers, and communities while still helping ensure that refiners continue to see the value in serving the California market.
The CEC and its partners are diligently trying to strike a balance to ensure that Californians have access to safe, reliable, affordable transportation fuels as the state transitions to a cleaner future.
Last updated: June 30, 2026
Yes. The CEC monitors inventories, refinery operations, imports, distribution conditions, and price signals, and coordinates with state and industry partners as needed. Aggregated data, including in-state refinery production and a survey of in-state inventory, can be found on the Weekly Fuels Watch webpage.
The CEC works closely with the California Governor’s Office of Emergency Services (CalOES) and other core state partners through the Emergency Fuels Working Group and Fuels Task Force. CalOES is the primary agency that responds to California emergencies.
As part of the energy security planning, preparedness, and response activities outlined in the 2025 California Energy Security Plan, CEC staff coordinate closely with the U.S. Department of Energy’s Office of Cybersecurity, Energy Security, and Emergency Response through various programs.
CEC staff also actively participate in the National Association of State Energy Officials (NASEO) Energy Security Committee, supporting national collaboration on state energy emergency planning. And we coordinate with NASEO Regional Petroleum Response Collaboratives to strengthen regional catastrophic fuel planning and response.
Last updated: June 30, 2026