{"id":784384,"date":"2026-07-25T21:29:22","date_gmt":"2026-07-25T21:29:22","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/784384\/"},"modified":"2026-07-25T21:29:22","modified_gmt":"2026-07-25T21:29:22","slug":"as-california-gas-prices-surge-experts-warn-this-spike-is-different","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/784384\/","title":{"rendered":"As California gas prices surge, experts warn this spike is different"},"content":{"rendered":"

California drivers are paying more every day at the pump<\/a>, and energy experts warn this latest surge may not be like the others.<\/p>\n

As global conflicts squeeze fuel supplies, US refineries are already running near full capacity<\/a> and emergency oil reserves have been heavily tapped, leaving little room to absorb another disruption.<\/p>\n

For California motorists, who already pay the nation\u2019s highest gas prices, that could mean even more pain ahead.<\/p>\n

Although shipments through the Strait of Hormuz briefly increased after last month\u2019s ceasefire between the US and Iran. John McAdorey \u2013 stock.adobe.com<\/p>\n

The global supply crunch may be driving prices higher. Jonathan Alcorn for CA Post<\/p>\n

In Los Angeles County, the average price for a gallon of self-serve regular gasoline rose Friday for the 10th consecutive day, climbing 2.2 cents to $5.645, according to AAA and the Oil Price Information Service.<\/p>\n

The average has jumped 24 cents over the past 10 days, including a 3.1-cent increase Thursday.<\/p>\n

Prices are now 16.8 cents higher than a week ago, 10.4 cents above a month ago and $1.165 more than they were one year ago.<\/p>\n

The spike is hitting drivers across the state.<\/p>\n

The state\u2019s taxes and environmental regulations have created a structural \u201cCalifornia premium.\u201d Pedro Colo for CA Post<\/p>\n

The squeeze has sent US wholesale diesel futures up 26% this month and pushed the average profit margin refiners receive for converting crude into gasoline and diesel to a record high. Jonathan Alcorn for CA Post<\/p>\n

AAA\u2019s regional office in Walnut Creek reported average prices of $5.76 per gallon in San Francisco, $5.58 in Oakland and $5.57 in San Jose.<\/p>\n

California\u2019s statewide average climbed to $5.59 a gallon, up 17 cents from last week, giving the state the highest average gas price in the nation.<\/p>\n

The latest surge comes as the global fuel market faces mounting pressure.<\/p>\n

US refineries are running at 96% of capacity, with plants in the Midwest and Rocky Mountain regions operating at 100%, according to the US Energy Information Administration.<\/p>\n

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US energy companies have also stepped up exports of petroleum products, including diesel and jet fuel, following Iran\u2019s closure of the Strait of Hormuz, a critical shipping route that carried about one-fifth of the world\u2019s oil supplies before the Middle East conflict began in February.<\/p>\n

\u201cThe US export increase is helping but it\u2019s a band-aid on a big gunshot wound,\u201d Joe DeLaura, senior energy strategist at Rabobank, told the Financial Times<\/a>. \u201cWe\u2019re trying to make up this deficit by running all out, but that means the second refineries go down that\u2019s really bad.\u201d<\/p>\n

The concern now is that the system has little room for another hit. Pedro Colo for CA Post<\/p>\n

California drivers are already starting from a far more expensive baseline. Andy Johnstone for CA Post<\/p>\n

Although shipments through the Strait of Hormuz briefly increased after last month\u2019s ceasefire between the US and Iran, renewed fighting has again frozen traffic through the waterway.<\/p>\n

Houthi rebels have also threatened a Red Sea route Saudi Arabia uses to move most of its crude exports.<\/p>\n

At the same time, Ukrainian drone strikes have reduced Russia\u2019s refining capacity, while Moscow this month banned diesel exports, adding more pressure to global fuel supplies.<\/p>\n

The squeeze has sent US wholesale diesel futures up 26% this month and pushed the average profit margin refiners receive for converting crude into gasoline and diesel to a record high.<\/p>\n

The concern now is that the system has little room for another hit.<\/p>\n

Washington has already released about 77% of the 172 million barrels it pledged in March from the Strategic Petroleum Reserve to cushion the supply shock caused by the Strait of Hormuz closure.<\/p>\n

The reserve, stored in underground salt caverns in Texas and Louisiana, has fallen to 311 million barrels, its lowest level since 1983.<\/p>\n

Industry analysts estimate its operational minimum is between 180 million and 200 million barrels, below which additional withdrawals could risk damaging infrastructure and disrupting pipeline operations.<\/p>\n

Meanwhile, inventories at the nation\u2019s largest commercial oil storage hub in Cushing, Oklahoma, have hovered around 20 million barrels since late June, near operational minimums.<\/p>\n

\u201cCommercial stocks are at tank bottom, US SPR stocks are potentially going to approach tank bottom, where is the flexibility to react to additional escalations?\u201d Sean Vale, an energy market analyst at Rystad Energy, told the Financial Times.<\/p>\n

The global supply crunch may be driving prices higher, but California drivers are already starting from a far more expensive baseline.<\/p>\n

The state\u2019s taxes and environmental regulations have created a structural \u201cCalifornia premium\u201d that keeps pump prices more than $1.50 a gallon above the national average, meaning every new disruption hits California motorists even harder.<\/p>\n

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