A Los Angeles Chevron station charged $8.71 per gallon Thursday, signaling the arrival of near-$9 gasoline in California as the Iran war enters its fourth week with no end in sight.
The station near Alameda Street and East Cesar Chavez Avenue is charging roughly $3 more per gallon than nearby competitors, but industry analysts warn this premium won't last. The California statewide average hit $5.37 last week, up 82 cents from a month ago, with the Los Angeles area averaging $5.72.
Kevin Thompson, CEO of 9i Capital Group, told Newsweek that "there will also be a permanent risk premium" tied to Iran's demonstrated ability to control the Strait of Hormuz. The conflict is impacting approximately 20% of the world's oil production, according to energy analysts tracking the situation.
California operates within what industry insiders call a "tight and relatively isolated gasoline system" that offers fewer supply alternatives when global crude prices surge or refinery disruptions occur. The state's existing premium pricing structure—driven by taxes and clean-air regulations—compounds the impact of global supply shocks.
Alex Beene, a financial literacy instructor, warned that California prices could "hit all-time highs in the coming weeks if the conflict doesn't subside." The previous record of $6.44 per gallon was set in October 2022 following Russia's invasion of Ukraine.
The consumer spending implications are substantial. For California drivers averaging 12,000 miles annually in vehicles getting 25 miles per gallon, the price increase from $4.50 to $5.50 per gallon adds roughly $480 in annual fuel costs. At $9 per gallon, that same driver faces an additional $2,160 annually compared to last year's levels.
