The Iran war continues to cause major disruptions in the global energy market. Prices of crude oil and global natural gas remain stubbornly high, even after an initial cease fire agreement here in the US, drivers across the country are feeling the pinch, but one state in particular is really struggling with the oil disruption. California seeing the most pain of any state when it comes to the pump. In fact, some areas of California now San Francisco, the Bay Area, the first area to ever see an $8 price tag for an average gallon of diesel.

We live in a privileged continent with very cheap natural gas and cheap oil compared to the rest of the world, but we can't get by thinking that we could be self sufficient and the rest of the world doesn't matter. Oil experts are saying that the conflict in the Middle East is shining a light on cracks in California's energy market. Here's how we got there. Californian drivers are already seeing gas prices climb well past $6 per gallon in some areas, California is perennially the highest state in the nation when it comes to gasoline prices.

Now, there are a lot of compounding factors that keep Californians gas prices higher than the national average. California has the nation's highest gasoline taxes. It has a cap and investor cap and trade program that basically charges refineries to be able to produce refined products to emit air pollution in the process of creating those products. California also has a low carbon fuel standard, which adds to the price motorists pay. It is a special carb mandated blend of gasoline, whereas much of the rest of the states are under jurisdiction by the EPA. But now,

amid a global supply disruption, there's a larger issue looming over the state where its crude oil comes from, California has really put a moratorium on new drilling for oil, so its own oil production has plummeted, but now relies on the few external sources of oil. Almost 75% of California's crude oil is imported from foreign countries, and more than a quarter of those shipments come from Middle Eastern countries, including Saudi Arabia, Iraq and the UAE. There aren't any pipelines that take product from elsewhere in the United States into California, so they're dependent on waterboard transmission, and that oil has fewer refineries to go to after

several shutdowns. Currently, California has 12 refineries, and of those, only eight produce that state approved carb gasoline blend. The last six months, kind of a turn in the chapter is that California, through a lot of these rules and regulations, has seen permanent shutdown of two major refineries that traditionally contribute about 20% of the state's overall gasoline production. And it's not just crude oil that California is important. The state also depends on imports to shore up its supply of refined products like gasoline and diesel. The diesel

prices in California now are above $7.50 a gallon. A typical truck on the road gets about seven ms per gallon. Think about your hauling almonds from, let's say, the Central Valley to Los Angeles, and every mile you travel, you're thrown $1 bill out the window. A tightening jet fuel market could also have far reaching impacts for the state. With airlines feeling the pinch, airports like lax and SFO are probably in a situation of tightness, because there's simply not going to be enough jet fuel. If people can't fly into California, the economy can't run this will start to have a massive negative impact

on California's economy. The bottom line here is that with each passing day, the backlog in the Strait of Hormuz grows, compounding the energy crunch that's hitting all areas of the globe you.