Gas Prices Are Skyrocketing Nationwide, But California Leads The Pack. Here's Why.

One state gets hit the hardest when there's a shock to the global supply of oil.

The United States and Israel’s war against Iran is throwing global oil markets into turmoil, with crude oil futures skyrocketing due to Iran largely closing off oil tanker access to the Strait of Hormuz, where 20% of the global oil supply flows out of.

Since the military strikes against Iran began on Feb. 28, crude oil futures have skyrocketed to over $100 a barrel for the first time in nearly four years, before dropping back to around $80 on Monday. The average price of a gallon of regular gas has jumped 19% over the last month, going from $2.93 a gallon this time last month to $3.57 a gallon as of March 11, according to AAA. However, in California, the average price sits at a whopping $5.33 a gallon, well outpacing the rest of the country.

California is often hit the hardest when the global oil supply is disrupted due to several reasons, including the overall higher cost of living, higher gas taxes, environmental regulations and limited refinery capacity.

California law requires a unique blend of gasoline, which is designed to reduce pollution and improve air quality, according to the U.S. Energy Information Administration (EIA). This makes the state particularly susceptible to supply chain disruptions due to the limited number of sources that produce this unique blend. Out-of-state refineries only manufacture this blend to serve the California market, meaning most of the gas used in the state comes from in-state refiners.

Data from the California Energy Commission (CEC) from March 2025 shows overall environmental regulations in the state contribute to an average rise of 54 cents per gallon.