California gas prices will probably rise gradually after the weekend attack on an oil processing plant in Saudi Arabia, an analyst said Monday.
Within a week or two, prices at the pump could be up 10 to 25 cents per gallon, said Patrick DeHaan, head of petroleum analysis at Gas Buddy, a company that tracks real-time gas prices. They could jump even higher if the Saudi plant cannot resume operations as quickly as expected, he said.
The drone attack on Saudi Arabia’s Abqaiq oil processing facility halved the kingdom’s oil production, according to Saudi Energy Minister Prince Abdulaziz bin Salman, slashing it by some 5.7 million barrels per day. Bloomberg reported Monday that Saudi Arabia could restart a “significant volume” of the halted oil production within days, though full restoration could take weeks.
If resuming operations takes months, though, “then it will be something more significant and a real supply crunch,” said Denton Cinquegrana, chief oil analyst at Oil Price Information Service.
Benchmark U.S. crude oil futures jumped more than 14% on Monday, as did Brent crude, the international standard. Changes in oil prices can be reflected a few days later in gas prices, DeHaan said.
Nevertheless, the effect on U.S. gas prices is expected to be minor, DeHaan said. That’s because the United States’ domestic oil production has grown in recent years, making the nation less reliant on imports from Saudi Arabia. And because Americans’ demand for gasoline is lower now than during the summer vacation travel season, he said, the pain will be less than it could be.
The average price of a gallon of regular gasoline in California was $3.631 on Monday, almost exactly the same as a week earlier and a year earlier, according to AAA. In the Los Angeles-Long Beach area, it was $3.672, also nearly unchanged from a week earlier and a year earlier.
The West Coast relies more on Saudi oil than other parts of the country do, which means California could see an extra increase of a few pennies per gallon of gas, DeHaan said. But the state does not rely on Saudi crude oil as much as it did 10 to 15 years ago.
“It doesn’t mean that you’re in dire straits,” he said.
California’s special blend of clean gasoline can be made with oil from a variety of places, Cinquegrana said.
Yemen’s Iran-backed Houthi movement has claimed responsibility for the attack in Saudi Arabia.