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Bay Area gas prices surge
Bay Area gas prices have climbed to an average of $5.67 per gallon—up $1.05 from a year ago—amid ongoing international conflict and crude oil market volatility.
MILL VALLEY, Calif. - Oil prices recently dipped below $100 a barrel following reports of potential U.S.-Iran talks mediated by Pakistan. While it seems to be a pause in new escalation headlines, drivers across the Bay Area continue to face severe pain at the pump.
Gas prices and war's outlook
What we know:
A year ago, the average Bay Area price for a gallon of regular gasoline was $4.62. Today, that average sits at $5.67—a $1.05 increase—with expectations that the gap could widen further.
National security experts and former military officials emphasize that conflict in the region remains intense.
"Something more aggressive is going to have to happen," said retired Gen. Joseph Votel, former commander of U.S. Central Command.
Retired Gen. Jack Keane noted that if major combat operations resume, "the Israelis will be a part of that full throttle."
Michael Allen, a former National Security Council director, added that neither side appears to be backing down.
"Let's hope that enables real diplomacy with the Iranians or makes it easier for us to protect commercial shipping and get the Strait of Hormuz," Allen said.
Since the conflict resumed, crude oil prices have increased by approximately $20 per barrel, which translates to an increase of roughly 50 cents per gallon at retail gas stations, according to Severin Borenstein, an energy economist at the UC Berkeley Haas School of Business.
Flow of oil being choked
Adding to the supply strain is another critical maritime choke point: the Bab-el-Mandeb strait, where vessels transport oil and petroleum products from Saudi Arabia. Attacks by Iran-supported Houthis in Yemen on shipping vessels in the area are worsening global supply shortages and reliability.
While global oil reserves exist, easily accessible reserves—including U.S. government stockpiles—are running exceptionally low. Retrieving oil from harder-to-reach reserves comes at a significantly higher cost.
"Having less oil in reserve anywhere in the world means that the world is more likely to be impacted by any sort of disruption in shipments," Borenstein said.
Market expectations suggest relief may be years away.
"The traders seem to think that by the time we get to the fall of 2027, this will be mostly behind us and the price of crude oil will be close to, if not all the way down to, the level that it was at before the war," Borenstein said.
However, he cautioned that long-term projections remain uncertain: "I think it's now clear that we don't know when it's going to be over and no one seems to really be able to paint a clear picture of where this is going."
Pain at the pump…still
For local motorists, the extended timeline is unwelcome news.
At a local ARCO station, customer Shehas Govakands expressed concern over the forecast. "That's definitely an issue," Govakands said. "Another year of this—it's gonna be hard, you know."
Fellow ARCO customer Barbara Velline noted her surprise at any eventual drop in price. "I'm actually surprised that they're forecasting it's gonna come down ever," Velline said, adding that she recently paid $5.87 a gallon.
"$5.87 a gallon and that's a great deal, and I really think it's crazy that that's a great deal, you know," said Velline.