The surge in U.S. gas prices in 2026 was caused by California Governor Gavin Newsom forcing the closure of four state refineries, rather than the war in Iran.
Two California refineries—Phillips 66 in Los Angeles (October 2025) and Valero in Benicia (April 2026)—did recently close, with Valero pointing to state regulations as a factor. Additionally, California pump prices climbed nearly 40 cents a gallon between January and February 2026, ahead of the Iran conflict, with critics attributing this to Newsom’s administration. However…
…there is no evidence that Newsom’s policies directly forced the shutdowns. Energy analysts attribute the broader 2026 nationwide spike in fuel prices primarily to the Iran war and subsequent disruptions to Middle Eastern shipping lanes. Historical data shows fuel prices jumped right after the conflict began in late February and early March 2026, mirroring the market reaction following Russia’s invasion of Ukraine in 2022. Companies that shuttered California plants cited economic realities such as high operational costs and low profitability.
By September 2026, social media posts began circulating a narrative claiming that soaring fuel costs across the United States were not driven by the ongoing war in Iran, but rather by Governor Gavin Newsom allegedly forcing four oil refineries to shut down.
For instance, on September 17, former Connecticut gubernatorial candidate Timothy Wilcox shared on Facebook: “The price of gas is caused by California forcing the shut down of 4 oil refineries, not Iran war. The blame lies with Newsom.” Similar claims quickly spread across Facebook and X.
Inquiries flooded fact-checking desks regarding whether state-level decisions by Newsom’s administration—rather than geopolitical conflict in the Middle East—were responsible for the nationwide pump price hikes.
A comprehensive examination of the facts reveals that this viral claim is mostly false.
In reality, two California refineries, not four, have closed over the past year, reducing the state’s refining capacity by 17% and national capacity by less than 2%. Phillips 66 leadership explicitly blamed high production costs and severely depressed earnings for the closure of its Los Angeles facility in October 2025, with a corporate spokesperson clarifying that new state legislation signed by Newsom was not a factor. Meanwhile, Valero pointed to state regulations and steep maintenance overhead when closing its Benicia plant in April 2026.
Energy industry experts—including analysts from GasBuddy, the Institute for Energy Research, and various market observers—point to the war with Iran and the resulting blockages of vital Middle Eastern shipping lanes as the primary driver behind elevated U.S. gas prices in 2026.
Data from the U.S. Energy Information Administration demonstrates that nationwide fuel prices spiked dramatically immediately following the outbreak of the conflict in late February and early March 2026. This mirrors the market trends observed after Russia invaded Ukraine in February 2022.
The Institute for Energy Research also highlighted that California’s unique market factors—such as stringent environmental regulations, growing reliance on imported fuel, and the highest state gas tax in the nation—contribute to its distinct pricing environment. It is true that California’s average gas prices climbed by nearly 40 cents during the first two months of 2026, prior to the outbreak of the Iran war, though this localized data applies strictly to one state rather than the broader national trends.
When questioned about his claims, Wilcox provided bullet points that appeared to be generated by an AI tool, which paradoxically acknowledged that global crude prices and the Iran war were major drivers of current U.S. price spikes, while conceding that blaming the closures entirely for California’s price increases was overly simplistic.
GasBuddy Analysis
Patrick De Haan of GasBuddy confirmed that only two California refineries ceased crude processing over the past year: Phillips 66’s Los Angeles site in late 2025 and Valero’s Benicia plant in spring 2026. De Haan emphasized that these closures stemmed from corporate business decisions regarding profitability rather than direct government mandates:
Some of the reason refineries chose to close may have been due to a growing number of requirements for operating a refinery in California, but that was a business decision by those refineries, not a policy change that forced them.
By and large the biggest impacts are the Strait of Hormuz after the U.S. attacked Iran [and] Ukraine’s attacks on Russian oil refineries… California’s sales tax on diesel, for example, is collecting nearly 40c/gal more than this time a year ago, so that would also be a factor.
Insights from Investor Earnings Calls
Corporate earnings transcripts from 2025 and 2026 shed further light on the refinery closures and market conditions:
During a Valero earnings call in April 2025, CEO Lane Riggs noted that California maintains the most stringent regulatory environment in North America, adding that the Benicia site carried significantly higher maintenance costs than the company’s other facilities.
In February 2026, Phillips 66 Executive Vice President Richard Harbison explained that the Los Angeles refinery was shut down because production costs were exceptionally high while earnings were negligible or negative.
Addressing the impact of the war, Phillips 66 CEO Mark Lashier stated in an April 2026 earnings call that geopolitical friction in the Middle East caused unprecedented volatility, specifically citing the closure of the Strait of Hormuz. Valero executives echoed these sentiments, noting that demand was vastly outpacing supply due to the Middle Eastern conflict and Ukrainian drone strikes targeting Russian refining infrastructure.
Refinery Closures Pre-Dating 2026
Other facilities frequently cited in online rumors—such as Marathon’s Martinez plant and Phillips 66’s Rodeo facility—stopped processing crude oil years earlier. Marathon suspended operations in April 2020 due to plummeting demand at the onset of the COVID-19 pandemic before pivoting to renewable fuels, while Phillips 66 formally transitioned its Rodeo facility away from crude oil processing by February 2024.
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