Uncertainty looms in California as the last oil tanker from the Middle East arrives in the Golden State, with gas prices already exceeding $6 per gallon. The Los Angeles Times reported that the New Corolla, which departed before the war in Iran began, is delivering approximately 2 million barrels of crude oil from Iraq to Long Beach. This is the final planned shipment to pass through the strait of Hormuz.
Supply Concerns
The California Energy Commission vice-chair, Siva Gunda, informed legislators that the state can meet fuel demand for the next six weeks with its current supply. However, California imports about a third of its oil from the Gulf and will now need to find alternative sources. Compared to other states, California relies significantly more on foreign oil imports.
While oil prices have risen recently, the current supply has not been severely affected as markets continue to receive oil that was already in transit when the conflict started. Michael Ross, a professor at UCLA, noted that the war and the closing of the strait of Hormuz have been buffered by tankers already at sea. He warned that this last shipment is the final supply keeping prices relatively stable, which should be a cause for concern.
Price Impact
The US-Israeli war with Iran has disrupted the global oil market and driven up gas prices worldwide. The American Automobile Association reported the national average reached $4.54 on Tuesday, while California’s average hit $6.16, the highest in nearly four years. The price of gas remains a major political issue in California, with Democratic candidates blaming Donald Trump’s war in Iran for the surge, while Republican Steve Hilton pointed to state regulations.
Governor Gavin Newsom criticized Trump over rising prices, stating that gas prices have risen more nationwide than in California since the war began. On Wednesday, stock markets surged and oil prices fell after Trump suggested that if Iran agreed to a deal, the war would end and the strait of Hormuz would reopen.
Economic data shows that rising fuel prices have disproportionately affected low-income Americans, who have reduced gas consumption but still spend more at the pump, according to the Federal Reserve Bank of New York.
