Why California Gas Is $5.29 Today: Iran War, Refinery Issues and Expert Predictions

California drivers are facing steep rises at the pumps, with the average price of regular gasoline reaching $5.29 (£3.94) per gallon as of 11 March 2026. This marks a 62-pence jump from last week and an 80-pence increase over the past month, driven chiefly by the Iran war's disruption to global oil supplies.

Coupled with ongoing refinery issues in the state, these factors have pushed California gas prices well above the national average of $3.54 (£2.64). Experts anticipate no quick relief without a swift end to the conflict.

Geopolitical Tensions Fuel Oil Surge

The war with Iran has sent crude oil prices soaring, with Brent briefly touching $119 (£88.79) before settling around $90 (£67) per barrel. Hostilities have stalled tanker traffic through the Strait of Hormuz, a chokepoint for about 20% of global oil and a fifth of liquefied natural gas shipments. Saudi Aramco's chief executive has warned of 'catastrophic consequences' if disruptions continue.

US officials have issued threats over further interference with oil flows. This volatility directly affects California, which imports much of its crude from affected regions like Kuwait and Venezuela. Severin Borenstein, a UC Berkeley professor, explained: 'Whether California gets its oil from the Central Valley or Kuwait or Venezuela or other parts of the world, it doesn't matter. It still affects the price of gasoline the same because the price of all those oils goes up.' The conflict's escalation, including strikes on Iranian oil depots, has amplified fears of tit-for-tat attacks on energy infrastructure.

Refinery Woes Compound Local Pressures

California's high prices are worsened by its unique challenges, including a sharp drop in refining capacity. The state has lost several facilities in recent years, with Valero set to idle its Benicia refinery in April, cutting output by 145,000 barrels daily. Phillips 66 shuttered its Los Angeles-area site late last year, and others like Valero Benicia Refinery have faced explosions and maintenance halts.

These closures stem from strict environmental regulations and high operational costs, forcing greater reliance on imports. The shift to summer-blend fuel, required from April, adds further upward pressure amid already tight supplies.

Taxes and fees contribute over $1.28 (£0.95) per gallon, far exceeding national levels. As Senator Suzette Valladares remarked on X: 'Iran didn't close California refineries. Our Governor's policies did'.

This leaves the state vulnerable to shortages if remaining plants encounter outages.

Expert Insights on Prolonged Volatility

Analysts foresee sustained high prices if the war drags on. Borenstein noted: 'There's a concern that this could turn into tit-for-tat attacks on oil resources, which could drive prices much higher, if that happened.' GasBuddy's Patrick De Haan has described the recent surge as one of the fastest in years following oil spikes and Strait of Hormuz disruptions, though he indicated that retreating crude prices could lessen the odds of national averages hitting $4.00 (£3.00) soon.

In California, the interplay of global factors with local refinery losses heightens risks. A USC Marshall School of Business study projected potential increases to between $7.35 (£5.48) and $8.44 (£6.29) by late 2026, driven by closures reducing in-state capacity by nearly a fifth.

De Haan's commentary has focused on broader market dynamics, including seasonal blend switches adding pressure in spring. Prices vary starkly across counties, from $4.67 (£3.48) in Modoc to $5.95 (£4.43) in Mono, highlighting the uneven impact. Shoppers are advised to compare stations, where differences of 30-40 pence are common. As of 11 March 2026, no immediate downturn in California gas prices appears likely without de-escalation in Iran.