CA4ES Energy Brief — India Can't Cook. California Can't Drive.

In India, families are queuing for hours to buy cooking gas. In California, drivers are paying $6.15 a gallon for gasoline. These are not separate crises. They are the same crisis — connected by a chemical called alkylate, a supply chain that runs through the Strait of Hormuz, and a war that has been raging for three months.

Iran's near-closure of the Strait cut off more than 90% of India's liquefied petroleum gas imports. New Delhi responded the only way it could: it ordered refiners to maximize LPG output. To comply, Reliance Industries — operator of the world's largest refinery in Jamnagar, Gujarat — slashed production of alkylates, motor fuel additives made using LPG as feedstock.

India's total alkylate exports fell from 61,000 barrels per day in March to 33,000 bpd in April. Cut in half. In one month.

That matters to California because alkylates burn cleaner than other gasoline additives, and California requires a unique fuel blend to reduce smog. The state's gasoline cannot be mixed the same way as gasoline in Texas or Florida. It depends on a global supply chain for specialty components — and that supply chain just lost its largest Asian source.

"With India's LPG supply constrained by the closure of the Strait of Hormuz, refiners there are producing and exporting less alkylate, adding pressure to an already tight California gasoline market," said Mason Hamilton, chief economist for the American Petroleum Institute.

The double whammy: California was already short on finished gasoline because Asian refiners are struggling to access Middle Eastern crude. Now the additives needed to blend what does arrive are disappearing too. GasBuddy analyst Patrick De Haan warned prices could cross $6.50 in the coming weeks. "The more acute the alkylate supply shortfall becomes, the higher it could push prices in California," De Haan said.

Governor Newsom has few options. Tax waivers would boost demand and deepen the shortage. Direct price controls do not exist for fuel additives. De Haan said the governor's only viable move may be to waive the state's own fuel specifications — the clean-burning gasoline rules California built its air quality reputation on.

"His hands are tied. That's the only choice he has," De Haan said.

The California Energy Commission said it does not think a waiver would help. It also said it does not foresee a shortfall.

Here is what the numbers say: alkylate supply halved in 30 days. California gasoline stockpiles are hovering near record lows. The Strait of Hormuz is still closed. And the state's fuel rules were written for a world where the supply chain worked.

That world ended three months ago.

Sources: Reuters, Kpler, American Petroleum Institute, GasBuddy

Trump pauses Iran attack, oil prices fall — but no deal in sight — Reuters
President Trump posted Monday that he was holding off a military attack on Iran scheduled for Tuesday to allow for negotiations. Brent crude dropped 1.5% to $110.37 a barrel on the news. But analysts are skeptical. "We continue to jump from one news cycle to the next, with plenty of noise being created but, so far, no meaningful developments pointing toward the beginning of the end of the war," said Ole Hansen of Saxo Bank. Meanwhile, Iran's latest peace proposal includes reparations for war damage and withdrawal of U.S. forces — terms Washington is unlikely to accept.

Record 9.9 million barrels drawn from Strategic Petroleum Reserve — Reuters
The largest single-week draw in the history of the SPR pushed total reserves to 374 million barrels — the lowest since July 2024. The Trump administration is seeking to release 172 million barrels total as part of a global agreement to calm oil markets. IEA chief Fatih Birol warned that commercial oil inventories worldwide are "depleting rapidly, with only a few weeks' worth left." Global observed inventories fell by a record 246 million barrels in March and April.

CARB cap-and-invest revenue to collapse, threatening wildfire funding and bullet train — CalMatters
CARB's April revision of its cap-and-invest rules softened the impact on refiners but will slash auction proceeds dramatically, according to the Legislative Analyst's Office. The remaining revenue will barely cover the $1 billion annual bullet train allocation and $1 billion for the governor's discretion — leaving nothing for wildfire protection, housing, and other programs that have relied on cap-and-invest funding. The Assembly's budget advisor warned the loss "would change the state budget process noticeably." As Dan Walters framed it: bullet train vs. wildfire protection.

High gas prices spur Americans to improvise, from bus rides to toy cars — Reuters
A Georgia handyman rigged a two-gallon engine into a pink Power Wheels Barbie Dream Camper to get to the supermarket. A church in Chicago gave away $5,000 in gas cards after Mother's Day services. Ridership on Bangor, Maine's public bus system is up 21% since January. An April Ipsos poll found 44% of Americans have cut back on driving. In El Segundo, California, drivers waited over an hour for $100 in free fuel from a tourism agency. "Transportation is not a luxury for many families," said Pastor Demetrius Davis. "It's survival."

Gas prices to spike before Memorial Day — 45 million Americans planning getaways — Sacramento Bee
GasBuddy warned the "next gas price spike could arrive just before Memorial Day." California's statewide average sits at $6.15 — within striking distance of the all-time record of $6.44 set in June 2022. AAA reported 45 million Americans are planning Memorial Day weekend travel, facing the highest holiday gas prices in four years. California city-by-city: Los Angeles $6.21, San Francisco $6.31, San Diego $6.17, Sacramento $6.10, Bakersfield $6.09.

Week of May 19, 2026 — Source: AAA, EIA

California regular gasoline held essentially flat at $6.15 — unchanged from last week and still within 29 cents of the all-time record of $6.44 set in June 2022. The national average ticked up a penny to $4.53 as the Hormuz premium continues to ripple through every U.S. market. The dollar gap between California and the nation narrowed slightly to $1.61, but the structural picture has not changed: California is paying a 36% premium over the rest of the country, and GasBuddy projects $6.50 in the coming weeks as Memorial Day demand meets shrinking alkylate supply. CEC Vice Chairman Gunda told lawmakers last week he expects prices to settle "under seven, more like $6.50." UC Berkeley's Severin Borenstein warned that if Hormuz stays closed another 60 days, crude could climb another $40–$80 per barrel — adding $1–$2 per gallon at the pump.

Data: AAA Gas Prices, EIA Weekly Retail, GasBuddy

The supply picture is deteriorating on two fronts simultaneously — crude oil and gasoline additives.

On the crude side, the EIA revised its disruption estimate upward: Middle East oil production losses peaked at 10.8 million barrels per day in May, up from its April forecast of 9.1 million bpd. The agency now assumes the Strait of Hormuz will be closed through the end of May. Global oil inventories are expected to fall 2.6 million bpd this year — nearly nine times worse than the 300,000 bpd draw forecast just one month ago. Brent is projected at $106/barrel through June.

On the additive side, India's alkylate exports collapsed from 61,000 bpd in March to 33,000 bpd in April as Indian refiners diverted feedstock to cooking gas production. California's unique fuel blend depends on alkylate — and its largest Asian source just halved output.

The Strategic Petroleum Reserve set a record draw of 9.9 million barrels last week, pushing reserves to 374 million barrels (lowest since July 2024). The U.S. Treasury extended sanctions waivers on Russian seaborne oil for 30 days to let "energy-vulnerable" countries continue purchasing. China's state refiners are slashing throughput on weak margins and supply disruptions.

The CEC said California is negotiating long-term supply deals with Asian refiners that could lock in three to six months of gasoline certainty. "Liquidity, in the short-term, is okay," Vice Chairman Gunda told the Assembly. "As we move forward, it's really about making sure more ships are coming."

The ships need to come faster than the supply is disappearing.

Sources: EIA Short-Term Energy Outlook (May 12), Reuters, Kpler, IEA Monthly Oil Market Report, CEC

The CA4ES Energy Brief is published weekly by Californians for Energy & Science, a 501(c)(3) nonprofit. Data-driven energy intelligence for Californians.

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