Sacramento’s decision to increasingly rely on foreign oil for fuel production is set to cost Californians even more at the pump.

The Wall Street Journal explains:

“The Iran war has created a new shortage on the oil market. This time the scarce commodity isn’t just crude – it is the ships that carry it … The impact has spread worldwide, as longer voyages and shuttle runs around Hormuz tie up ships and push the daily rate of hiring oil tankers to records.”

The cost increases are truly staggering. As Bloomberg reports:

“There’s no precedent for what’s happening right now in the supertanker market … It’s beyond the wildest dreams of many shipowners, for whom last year’s average rate of about $58,000 a day was just fine. Today their very large crude carriers are earning more than $1.2 million a day[.]”

Indeed, according to Baltic Exchange data, shipping fees can now add about 25% to the cost of crude – up from a norm of about 5% in recent years.

One analyst put it plainly: “It has never been this expensive to move oil around.”

For import-dependent regions like California, the tanker shortage could put upward pressure on fuel prices. As Adi Imsirovic, a former energy trader and lecturer at the University of Oxford, told the Journal:

“What matters for refiners is the delivered cost of the crude, and that includes freight. The price at the pump includes all of it and the consumer has to pay the full price.”

California can’t control the cost of shipping crude around the world. That’s one more reason to produce more of the oil we still need here at home.