Santa Barbara Gas Prices Soar as Iran Conflict Impacts Global Supply

Gasoline prices in Santa Barbara have soared since the beginning of the war in Iran, in line with national and global price surges. On Monday, nine days after the first American and Israeli strikes, prices in Santa Barbara averaged $4.98 per gallon—an increase of 60.5 cents per gallon from the previous week’s average. 

Per a report from GasBuddy, the cheapest station in the city sold gas for $4.39 per gallon on Sunday, March 8; the most expensive charged $5.75 per gallon. 

The dramatic price increases are the result of Iran’s effective shutdown of the Strait of Hormuz, a vital shipping route that carries 20% of the global crude oil supply. Iran controls the northern side of the chokehold, which is the only passage connecting the Persian Gulf to the open sea. On March 2, Iran declared the strait closed and threatened to attack any ship that attempted to pass, drawing traffic through the normally bustling waterway to a tense standstill. Since then, the nationwide average gasoline price has climbed 51.1 cents per gallon. 

“We have seen almost unprecedented levels of volatility when it comes to the crude oil price,” said Matt McClain, a petroleum analyst for GasBuddy. Early Monday morning, oil prices briefly hit $119.50 per barrel of Brent crude, the international standard; by Tuesday afternoon, they were wavering in the range of $80 to $90 per barrel.

McClain says the extreme fluctuation is due to “a large amount of information in every direction,” with prices dropping or spiking in response to each new headline, report, and rumor. Prices fell below $80 per barrel, for example, after Energy Secretary Chris Wright claimed in a now-deleted X post that the United States Navy had escorted an oil tanker through the Strait of Hormuz, then swiftly rose after White House press secretary Karoline Leavitt confirmed that Wright’s announcement was false. 

California drivers may feel particularly hard hit by the price hikes, given that gasoline is markedly more expensive in the Golden State. Average California gasoline prices are currently $1.75 above the national average. A combination of factors account for this discrepancy. California has some of the strictest and most extensive environmental regulations in the country, and mandates the use of a special gasoline blend designed to create less pollution. The state also has the highest gas tax in the United States. Moreover, its processing capacities are shrinking due to a slate of oil refinery closures. 

With in-state oil production in longstanding decline, California has turned to foreign oil. In 2025, 61.1 percent of crude oil processed at California refineries was imported from abroad, according to the California Energy Commission. The majority of that foreign oil came from South America, but a significant 29 percent of foreign oil came from the Middle East; in fact, Iraq was America’s second highest foreign supplier, less than half a percentage point behind Brazil. 

Another 16 percent of California’s crude oil came from Alaska; just over one fifth of the roughly 480,000 barrels it refined last year originated in-state. This situation has triggered concern from a range of parties, from oil industry lobbyists to Governor Gavin Newsom. But—as readers who are following Sable Offshore’s ongoing legal battle to restart offshore oil production in Santa Barbara County are likely aware—the notion that California and the United States are in an “energy crisis” is disputed and highly politicized. Oil is a global commodity of which the United States is already a prolific producer, meaning a reduction in the proportion of imported crude oil wouldn’t necessarily translate to a meaningful decrease in crude oil prices or gas prices.

McClain said the United States’ reliance on Middle Eastern crude oil is overall minimal, and that the recent price surges reflect the global nature of the petroleum market rather than a direct disruption to American oil supply. “The reason why prices are rising globally is because crude oil is traded on a global exchange, and it’s also traded in US dollars,” he said. 

In a public statement on Tuesday, Governor Newsom lambasted President Trump over the surging gas prices. “‘Drill Baby Drill’ was always a lie to enrich Trump’s Big Oil donors—not a strategy to keep prices low, because oil is a global good with a global price,” Newsom said.

McClain was not aware of the extent of California’s foreign oil consumption, but attributed the state’s high gasoline prices, which predate the conflict in Iran, to its environmental regulations and tax policy. The current price increase is reflective of a “global issue” and is not specific to California, he added. 

It remains to be seen how gasoline and crude oil prices will change as the conflict in Iran continues. McClain expressed mild optimism that prices will stabilize in the next several days, but emphasized that there are no certain outcomes given the rapidly evolving nature of the war.

“We are looking at a situation where it remains volatile, and that is every war,” McClain said.