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By Thomas Westerholm
Life & Trends Reporter
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As the war in Iran continues to disrupt global oil markets, gas prices have reached $8 in some areas of Los Angeles, and oil prices have surged across the nation.
Posting on TikTok, user Marcie (@heyheyheymarcie) shared a video of a Chevron gas station in downtown Los Angeles, where prices had spiked to more than $8.21 per gallon for regular unleaded gas.
At the time of writing, the video had been viewed more than 3.1 million times.
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The California Factor
While the $8 pricing appears limited to one station for the time being, statewide prices in California have surged higher than $5 per gallon on average due to a variety of factors.
California specifically requires gasoline that burns cleaner as part of its environmental regulations, and the refineries that produce the cleaner gasoline are mostly located in California.
The state also levies higher fuel taxes on gas than other states—according to the U.S. Energy Information Administration, California pays roughly $0.90 per gallon in combined local, state and federal taxes and fees on its gas.
Finally, California is isolated geographically from much of the rest of the United States—no pipelines supply California from across the Rocky Mountains, and only a limited number deliver fuel to the West Coast from the Gulf Coast.
The War in Iran
However, while California is an extreme example, the war in Iran has a major impact on global oil markets, which in turn affects gas prices in the United States.
The Strait of Hormuz is one of the world's most important oil transit routes, since roughly 20 percent of the world's oil shipments run through it—nearly 20 million barrels of oil per day make their way through a narrow 29-mile corridor between Iran and Oman.
According to reports, the global oil supply has fallen by millions of barrels per day. When oil supply falls, traders bid up the price of crude oil, and prices for refineries rise, which raises the price of gas.
Much of the oil that flows through the Strait of Hormuz goes to Asia, rather than the United States—which produces a lot of oil itself—but when global prices of crude oil rise, American refineries pay higher prices as well.
Gas prices in every state are now above $3 per gallon.
What People Are Saying
Donald Trump told Reuters that he was not concerned about rising gas prices: “If they rise, they rise. I don’t have any concerns about it.
"They’ll drop very rapidly when this is over, and if they rise, they rise, but this is far more important than having gasoline prices go up a little bit.”
What's Next
One economist predicted that Americans will soon be paying more than $4 per gallon.
Newsweek has reached out to @heyheyheymarcie for comment via TikTok.
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