The closure of the Strait of Hormuz has restricted the flow of energy to global markets, severely impacting oil prices. As a direct result of rising oil prices, gas prices have also risen worldwide, including in the United States. Although the average prices of gas and diesel have risen in the U.S. to $4.51 per gallon of gas and $5.63 per gallon of diesel as of May 18, the rise in energy prices has been substantially more noticeable in California. On the same day, California reported average gas prices of $6.15 per gallon for regular and $7.41 per gallon for diesel.Unfortunately, the impact of the rise in fuel costs in California goes beyond its borders, since Nevada and Arizona import sizable portions of their petroleum products from Southern California refineries, and, due to the amount of agricultural products produced in and exported from the state.
CENTCOM REFUTES CLAIMS THAT NAVY RESUMED ESCORTING VESSELS THROUGH STRAIT OF HORMUZ
The stark difference in cost between the national average of gas and diesel, which states such as California skew, and California’s ballooning prices, is a result of a combination of overregulation, which discourages the investment and maintenance of a robust energy sector in the state, unique blend requirements for oil refining, and an overreliance on foreign seaborne imports despite having significant known oil reserves. An overreliance and rising cost that is spilling over into other industries, such as agriculture and transportation.
