California drivers may pay a bit more at the gas pump in the next few days after Israel’s military strike into Iran, but some fuel analysts don’t expect a dramatic surge in prices, and one thinks Golden State consumers may not see much impact at all.
Denton Cinquegrana, chief oil analyst at OPIS, the Oil Price Information Service that provides data and forecasting on global energy, predicts gas prices across the country will rise about 8 to 10 cents per gallon within the next week.
“We’ve seen things like this happen before and we’ll see it again,” Cinquegrana said.
California prices may go up a few pennies more because California refineries rely primarily on crude oil from foreign countries.
“Certainly, California is more vulnerable than markets that are primarily running on U.S. crude oil production,” said David Hackett, president of Stillwater Associates, a transportation energy consulting company in Irvine.
But Patrick De Haan, GasBuddy’s head of petroleum analysis, said recent boosts in gasoline supply to California from Asia and other factors may largely insulate drivers in the Golden State from price increases.
“I don’t expect this to be super impactful,” De Haan said. “Stations may go up a few cents here and there, but I think for more stations than not, there should be plenty of room this time to absorb what is happening right now.”
All three analysts said it looks like gasoline prices won’t skyrocket, provided international events don’t get out of hand.
For one thing, early reports indicate the air strikes did not hit Iran’s petroleum facilities, which means the Islamic Republic should be able to keep producing crude oil at the same rate as before.
Due to international sanctions, Iran relies heavily on China. It’s been estimated that China imported 89% of Iranian oil in February 2024.
Israel launched an overnight attack aimed at taking out Iran’s nuclear program, citing fears that its chief adversary was getting closer to building an atomic weapon. Iran retaliated by unleashing ballistic missiles on Israel late Friday.
So why would a potential disruption in Iran affect gas prices in other places, including California?
Iran’s response to the Israeli strike could lead to potential blockages in the Strait of Hormuz, a narrow waterway in the Persian Gulf where about 20% of global oil es through.
“Oil is a world market,” said Hackett. “So if there are significant disruptions in one place, as far as prices are concerned, it will ripple around the world.”
In the immediate aftermath of the airstrikes, the futures price for Brent — the international benchmark for crude oil — jumped as high as $78.50 per barrel overnight. But the markets settled a bit and Brent finished the trading day Friday at $74.23 a barrel, up 7% from the previous day.
The price of West Texas Intermediate — the benchmark for U.S. crude — closed the trading day Friday at $72.98 a barrel, up 7.3% compared to Thursday.
“If nothing else happens that impacts supply, these may be the highs for the rest of the year in oil prices,” Cinquegrana said.
In another encouraging sign for consumers, the secretariat at OPEC, the Organization of the Petroleum Exporting Countries, sent a message Friday morning on X indicating the cartel is not considering raising oil prices, saying, “there are currently no developments in supply or market dynamics that warrant unnecessary measures.”
The average price for a gallon of gasoline in California on Friday was down a penny compared to the day before, standing at $4.652 according to AAA. The average price in the San Diego area was $4.662, virtually unchanged from Thursday.
The national average rose just a one-half cent Friday to $3.132 a gallon.
De Haan estimates national prices will rise 10 to 15 cents in the next week or two.
“I think in most areas of the country, prices are going to go up,” he said. “Is it going to be insanely impactful? No. Is it something where I’m rushing out to fill my tank? No.”
According to data compiled by the California Energy Commission, 63.5% of oil supply sources to California refineries in 2024 came from foreign sources. Of that total, the four largest countries supplying the California market were Iraq, Brazil, Guyana and Ecuador.
Domestically, oil produced in California ed for 23.3% of the Golden State’s supply to refineries and Alaska contributed 13.3%.
