California’s High-Price Petroleum Virus May Spread Across The West, Analyst Says

California’s troubled refineries threaten to spread a diesel price virus hitting drivers and businesses across the West, an analyst warns.

Wholesale diesel prices in Los Angeles and San Francisco have reached record highs, with Los Angeles prices surging 52 cents per gallon and San Francisco prices climbing 21 cents, Patrick De Haan, head of petroleum analysis at GasBuddy reported on X late Tuesday. The increases come as refinery maintenance squeezes regional fuel supplies, threatening to push retail diesel prices higher.

“As neighboring states are in the same vicinity and sometimes supplied by California, pricing impacts will likely spill into WA, OR, NV and AZ as well as CA,” De Haan told the Daily Caller News Foundation.

“A high level of refinery maintenance is impacting the West Coast,” De Haan added. “As what comes out of a barrel is more gasoline than diesel, it is diesel that is seeing larger impacts right now.”

The refinery maintenance crunch comes as American energy producers continue navigating disruptions tied to the Iran conflict, which has placed additional pressure on global fuel markets.

Diesel prices have already climbed so high in California that some stations reported prices reaching the $9.99 limit on their pumps. California’s gas prices remain around $2 above the national average, according to the American Automobile Association (AAA) as of Wednesday.

“We are entering the fall turnaround season for refineries,” energy analyst David Blackmon told the DCNF. “Many U.S. plants have been running at full capacity well beyond their scheduled maintenance calendars due to the Iran Conflict — keeping them running full-out even longer risks breakdowns and incidents no one wants to see.”

Years of regulatory pressure and refinery closures have left California increasingly dependent on fuel shipments from Asia and the Gulf Coast, making the state’s fuel market more vulnerable to disruptions, energy analyst Stuart Turley argued.

“There is only two ways to lower prices at the pump for diesel, gasoline and jet fuel. That is demand destruction, or more refineries,” Turley told the DCNF.

California was projected to lose approximately 17% of its refining capacity through the closures of two major facilities, according to a July 2025 report from the U.S. Energy Information Administration (EIA). The agency warned that the loss of production could increase fuel price volatility across the West Coast.

“If gas diesel prices do go higher as De Haan predicts, California can look to [Democratic Gov.] Gavin Newsom and his regulatory agenda that has resulted in decimating the state’s refining sector in recent years,” Blackmon told the DCNF.

The West Coast’s relative isolation from Gulf Coast refining hubs makes it difficult to replace lost production through domestic pipelines, per the EIA’s 2025 report. The agency identified imports from Asia as a likely source of replacement fuel, leaving the region increasingly exposed to international supply conditions.

“California’s shrinking refining capacity will undoubtedly harm its residents and its highly dependent neighbors, especially Arizona and Nevada, given both states’ substantial reliance on California for transportation fuels, including gasoline and diesel,” Caleb Jasso, Senior Policy Advisor, Institute for Energy Research told the DCNF. “Unfortunately, what happens within California’s state energy market does reverberate throughout its neighboring states, and because Arizona has no in-state refining capacity and Nevada only has one, which came back online last month and has a low daily refining capacity rate, they are each heavily reliant on California for, in Arizona’s case, nearly a third and, in Nevada’s case, the overwhelming majority of their fuel. “

“The hostile environment California created for traditional fuels through policy and political rhetoric led to the recent closures of two major refineries and may inevitably lead more in-state refineries and energy producers to re-evaluate the benefits of remaining in California, as well as lead to even higher prices at the pump,” Jasso said.

“Amid the ongoing global supply disruption, California’s restrictive energy policies have led to a greater dependence on foreign sources of energy, weakening energy security across the West. Preserving fuel supply, maintaining market flexibility and supporting investment in critical infrastructure are essential to protecting consumers from unnecessary price volatility while strengthening America’s long-term energy security,” an American Petroleum Institute (API) spokesperson, told the DCNF.

California serves as a critical artery for America’s trucking industry, with the ports of Los Angeles and Long Beach handling roughly 31% of the nation’s containerized waterborne trade in 2025, according to the Port of Los Angeles.

“We run California, and we try not to fill up there. But one day, we put fuel in, and it was nine dollars a gallon,” Marcus Overcast, owner of Truckload LLC told the DCNF.
The trucking industry is already feeling the squeeze, with at least 16 transportation companies filing for bankruptcy in less than a month as diesel prices surged.

“Unfortunately, California’s pathologies related to energy markets do bleed over into neighboring states like Arizona and Nevada,” Blackmon said.

“None of this needed to happen — every bit of it is due to stupid policy decisions by state public officials. They were warned of the inevitable consequences when those decisions were made, and now those consequences have arrived.”

Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities of our original content, please contact licensing@dailycallernewsfoundation.org