California Governor Gavin Newsom has urged residents to avoid Chevron gas stations, accusing oil companies of profiting from high costs as Americans continue to pay elevated prices at the pump. The Governor's office attributed the high prices to the ongoing Iran war and advised consumers to skip brand names to save money.

Consumer Advisory

On Saturday, the Governor's official Press Office shared a statement on social media platform X, advising Californians to shop around for unbranded gas. The post stated that unbranded gas offers lower costs and the same quality in California. The office encouraged consumers to keep the extra cash for their holiday rather than spending it on "Big Oil."

Chevron did not immediately respond to a request for comment regarding the Governor's renewed call for a boycott. The advisory follows previous tensions after Chevron put up signs criticizing lawmakers in Sacramento for choosing foreign oil over local jobs.

Gas Price Data

GasBuddy analyst Patrick De Haan reported that the Fourth of July holiday saw prices fall 81 cents lower than their May peak. Despite the drop, prices remained 65 cents higher than a year ago. According to De Haan, gas prices in 41 states remained below $4/gallon.

Data from the American Automobile Association (AAA) confirmed the national average price of gas was $3.8040/gallon on Sunday. States such as Hawaii, California, and Washington continued to pay over $5/gallon, with Hawaii recording the highest cost in the country.

Market and Geopolitical Context

West Texas Intermediate (WTI) crude fell to $68.43/bbl, while Brent crude traded at $71.71/bbl. The United States Oil Fund rose 0.69% to $103.98 on July 2 at market close.

Geopolitical tensions continued to influence the market as Iran’s Deputy Foreign Minister for Legal and International Affairs, Kazem Gharibabadi, reaffirmed that the Strait of Hormuz remains under Tehran’s command. This statement followed a U.S. Central Command security summit in Bahrain to discuss regional security with Qatar, the UAE, and Saudi Arabia.

Investor Bill Ackman has amplified warnings from exiled Russian oligarch Mikhail Khodorkovsky that Russia is facing a deepening fuel crisis driven by logistical failures and government policy rather than solely by Ukrainian drone strikes. Khodorkovsky, the former head of Yukos, highlighted videos of long queues at gas stations and stated that shortages have spread to regions thousands of kilometers from the front lines. He argued that the Kremlin's decision to lower fuel quality standards instead of implementing market-based pricing has exacerbated the supply crunch, asserting that no Ukrainian drones have done as much damage to the Russian economy as its own government.

Refinery Attacks and Government Response

The comments follow Ukrainian drone strikes that have ignited major Russian oil refineries in the Krasnodar and Yaroslavl regions. While addressing the United Russia party congress, President Vladimir Putin acknowledged that Russia is going through a "difficult period" but assured the government would meet social obligations. To counter the attacks, Putin announced plans to increase air defense system production, import more fuel, and expedite repairs at damaged facilities. Deputy Prime Minister Alexander Novak indicated a review of fuel exports to prioritize domestic supply.

Geopolitical Context and Market Impact

The disruption to refining capacity has pushed global oil prices higher, with Brent crude trading up and WTI futures rising. The escalation occurs as G7 nations, including President Donald Trump, pledged to boost military aid to Ukraine and tighten sanctions on Russia's energy sector. Trump recently held a nearly 90-minute call with Putin to discuss brokering a resolution to the war. Despite the domestic shortages, Russia remains a major crude oil producer, pumping roughly 9 million barrels per day, with China and India replacing much of the European demand lost due to sanctions.