‘Triple-whammy’: Oregon, Bend gas prices skyrocket due to pipeline outage, refinery issues; AAA says relief in sight
KTVZ
PORTLAND, Ore. (KTVZ) – Gas prices in Oregon and Washington are surging due to an outage at the Olympic Pipeline, as well as planned and unplanned maintenance at refineries in Washington and California, but AAA Oregon/Idaho said Tuesday the situation should ease and prices begin falling soon.
Here is this week’s AAA Oregon/Idaho gas prices report:
The Olympic Pipeline carries fuel from Washington state refineries to Portland and was out of operation starting on about September 2. Reports indicate that the pipeline is resuming operations. Meanwhile, maintenance often occurs at refineries ahead of the switch to winter-blend fuel, which can now be sold at Oregon retailers.
For the week, the national average for regular slips about half a cent to $3.19 a gallon. The Oregon average jumps 15 cents to $4.29 a gallon. This is the second-largest week-over-week jump for a state in the nation, behind Washington state, where the average soared 16.5 cents. The Oregon average is at its highest price since May 2024. Bend’s average also rose about 15 cents this week, to $4.19 a gallon.
“Drivers in Oregon and Washington are being hit by a triple-whammy when it comes to gas prices. The outage of the Olympic Pipeline as well as refinery maintenance, created tight supplies in the region, causing wholesale prices to spike. At the same time, refineries were producing the last of the summer-blend fuel before this week’s switch to winter-blend gas.
“Drivers here should get some relief soon, as the Olympic Pipeline resumes normal operations. Also, gas stations can now sell winter-blend fuel, which costs less to produce, and can eventually amount to savings of 10 to 30 cents a gallon at the pumps,” says Marie Dodds, public affairs director for AAA Oregon/Idaho.
The 400-mile Olympic Pipeline carries refined petroleum products from the refineries in Washington State to distribution terminals in the Pacific Northwest, including Portland. During this month’s outage, fuel was sent by barge, which takes more time and is more expensive. Gas prices in Oregon and Washington shot up as a result. In fact, Washington now has the most expensive gas in the nation, with a current average of $4.66.
The other factor that could still influence gas prices is hurricane season. There’s still the potential of a major storm that could impact production and distribution of oil and gas if a storm takes aim at the Gulf Coast.
The Oregon average for regular gas began 2025 at $3.45 a gallon and is currently just below $4.29. The highest price of the year so far is $4.297 on September 13 and 14. The lowest price of the year so far is just under $3.45 a gallon on January 2.
The national average began 2025 at $3.06 a gallon and is currently at $3.19. The highest price of the year so far is $3.268 on April 4. The lowest price of the year so far is $3.06 on January 5.
This week, 33 Oregon counties have averages at or above $4, compared to 23 a week ago:
Benton $4.08
Clackamas $4.42
Clatsop $4.37
Columbia $4.40
Coos $4.33
Crook $4.28
Curry $4.42
Deschutes $4.17
Douglas $4.24
Grant $4.49
Gilliam $4.15
Harney $4.49
Hood River $4.30
Jackson$4.37
Jefferson $4.13
Josephine $4.43
Klamath $4.24
Lake $4.35
Lane $4.19
Lincoln $4.12
Linn $4.11
Marion $4.17
Morrow $4.10
Multnomah $4.45
Polk $4.07
Sherman $4.25
Tillamook $4.49
Umatilla $4.05
Union $4.02
Wallowa $4.25
Wasco $4.49
Washington $4.43
Yamhill $4.32
Demand for gasoline in the U.S. decreased from 9.12 million b/d to 8.51 for the week ending September 5, according to the U.S. Energy Information Administration (EIA). This compares to 8.48 million b/d a year ago. Total domestic gasoline supply increased from 218.5 million barrels to 219.9. Gasoline production decreased last week, averaging 9.6 million barrels per day compared to 9.9 million barrels per day the previous week.
Gas prices usually drop in the fall, due to the switch from summer-blend to winter-blend fuel, which costs less to produce. The switch starts in September. Many areas, including Oregon, can sell winter-blend fuel starting September 15. However, Northern and Southern California require summer-blend fuel through October 31. Prices usually decline to their lowest levels of the year in late fall and early winter before increasing again in the late winter and early spring.
Gas prices typically rise starting in mid-to-late winter and early spring as refineries undergo maintenance ahead of the switch to summer-blend fuel, which is more expensive to produce and less likely to evaporate in warmer temperatures. The switch occurs first in California, which is why pump prices on the West Coast often rise before other parts of the country.
The East Coast is the last major market to switch to summer-blend fuel. Most areas have a May 1 compliance date for refiners and terminals, while most gas stations have a June 1 deadline to switch to selling summer-blend until June 1. Switch-over dates are earlier in California, with some areas in the state requiring summer-blend fuel by April 1. Some refineries will begin maintenance and the switchover in February.
The U.S. price of crude oil (West Texas Intermediate) had been mostly in the low-$60s to mid-$70s since last September. Crude prices spiked to the mid-$70s in mid-June in response to the strikes between Israel and Iran, and then the U.S. strike on Iran’s nuclear facilities, but then prices fell back into the $60s on the belief that the conflict would not have a major impact on global oil supplies. Crude prices fell in early April as markets reacted to President Trump’s tariffs and the impact on U.S. and global markets. Additional downward pressure on crude prices came after the decision by OPEC+ to increase production.
The lowest closing price since September was $57.13 on May 5, which was the lowest closing price since February 2021. The recent high price for crude was $80.04 per barrel on January 15, which was the highest price since last August.
Crude oil is trading around $64 today compared to $63 a week ago and $70 a year ago. In 2024, West Texas Intermediate ranged between $66 and $87 per barrel. In 2023, WTI ranged between $63 and $95 per barrel. WTI reached recent highs of $123.70 on March 8, 2022, shortly after the Russian invasion of Ukraine, and $122.11 per barrel on June 8, 2022. The all-time high for WTI crude oil is $147.27 in July 2008.
Crude prices are impacted by economic news as well as geopolitical events around the world including the current economic uncertainty, unrest in the Middle East, the war between Israel and Hamas, and the war between Russia and Ukraine. Russia is a top global oil producer, behind the U.S. and Saudi Arabia. Crude prices have been volatile after the attack on Israel by Hamas in October 2023.
While Israel and the Palestinian territory are not oil producers, concerns remain that the conflict could spread in the Middle East, which could potentially impact crude production in other oil-producing nations in the region. In addition, production cuts by OPEC+ in previous years tightened global crude oil supplies, which continued to impact prices. But this year, the cartel boosted production by 411,000 barrels per day in May and June, and July, 548,000 barrels per day in August, 547,000 barrels per day in September, and 137,000 barrels per day in October.
Crude oil is the main ingredient in gasoline and diesel, so pump prices are impacted by crude prices on the global markets. On average, about 52% of what we pay for in a gallon of gasoline is for the price of crude oil, 16% is refining, 15% distribution and marketing, and 17% are taxes, according to the U.S. Energy Information Administration.
Meanwhile, crude oil production in the U.S. remains near record highs. The U.S. Energy Information Administration (EIA) reports that crude production in his country rose from 13.42 to 13.49 million barrels per day for the week ending September 5. The record high is 13.63 million barrels per day for the week of December 6. Production has been at 13.5 million barrels per day many times since October 2024. The U.S. has been the top producer of crude oil in the world since 2018 and has been increasing its oil production since about 2009.
Quick stats
Oregon is one of 15 states and the District of Columbia with higher prices now than a week ago. Washington (+16.5 cents) and Oregon (+15 cents) have the biggest week-over-week jumps in the nation. Maryland (-11 cents) has the largest week-over-week decline in the nation. The average in North Dakota is flat.
After six weeks, Washington ($4.66) bumps California ($4.65) as the state with the most expensive gas in the nation. Hawaii ($4.47) is third, and Oregon ($4.29) is fourth. These are the four states with averages at or above $4 a gallon. This week 26 states and the District of Columbia have averages in the $3-range. There are 20 states with an average in the $2 range this week.
The cheapest gas in the nation is in Mississippi ($2.70) and Oklahoma ($2.75) and. No state has had an average below $2 a gallon since January 7, 2021, when Mississippi and Texas were below that threshold. At the time, the COVID-19 pandemic drove significant declines in crude oil and gasoline demand in the U.S. and around the world.
The difference between the most expensive and least expensive states is $1.96 this week, compared to $1.92 a week ago.
Oregon is one of 40 states with higher prices now than a month ago. The national average is four cents more and the Oregon average is 30 cents more than a month ago. This is the second-largest month-over-month increase for a state in the nation. Arizona (+35 cents). has the largest month-over-month increase in the nation, while Washington (+26 cents) has the third largest monthly increase. Ohio (-20 cents) has the largest month-over-month drop.
Oregon is one of 15 states with higher prices now than a year ago. The national average is eight cents less, while the Oregon average is 38 cents more. Oregon has the largest year-over-year increase in the nation. Washington (+51 cents) has the second-largest increase. Utah (-23 cents) has the largest yearly drop.
West Coast
The West Coast region continues to have the most expensive pump prices in the nation with all seven states in the top 10. It’s typical for the West Coast to have six or seven states in the top 10 as this region tends to consistently have fairly tight supplies, consuming about as much gasoline as is produced. In addition, this region is located relatively far from parts of the country where oil drilling, production and refining occurs, so transportation costs are higher. And environmental programs in this region add to the cost of production, storage and distribution.
The pipeline and refinery issues in the region are also impacting pump prices this week.
As mentioned above, Washington bumps California as the state with the most expensive gas in the nation. Hawaii, Oregon, Nevada, Alaska, and Arizona round out the top seven. Oregon is fourth most expensive for the 17th week in a row.
Six of the seven West Coast states are seeing week-over-week increases: Washington (+17 cents), Oregon (+15 cents), Alaska (+11 cents), Nevada (+5 cents), Arizona (+5 cents), and California (+3 cents). Hawaii (-1 cent) is the only state in the region with a week-over-week decline.
The refinery utilization rate on the West Coast fell from 89.2% to 86.2% for the week ending September 5. This rate has ranged between about 72% to 93% in the last year. The latest national refinery utilization rate ticked up from 94.3% to 94.9%.
The refinery utilization rate measures how much crude oil refineries are processing as a percentage of their maximum capacity. A low or declining rate can put upward pressure on pump prices, while a high or rising rate can put downward pressure on pump prices.
According to EIA’s latest weekly report, total gas stocks in the region inched up from 30.21 million bbl. to 30.37 million bbl. An increase in gasoline stocks can put downward pressure on pump prices, while a decrease in gasoline stocks can put upward pressure on pump prices.
Oil market dynamics
Crude oil prices are up slightly to start this week after attacks by Ukrainian drones on Russian energy infrastructure.
Meanwhile, the EIA reports that crude oil inventories increased by 3.9 million barrels from the previous week. At 424.6 million barrels, U.S. crude oil inventories are about 3% below the five-year average for this time of year
At the close of Friday’s formal trading session, WTI gained 32 cents to close at $62.69. At the close of Monday’s formal trading session, WTI added 59 cents to settle at $63.30. Today crude is trading around $65 compared to $63 a week ago. Crude prices are about $5 less than a year ago. ($70.09 on September 16, 2024)
Drivers can find current gas prices along their route with the free AAA Mobile app for iPhone, iPad and Android. The app can also be used to map a route, find discounts, book a hotel and access AAA roadside assistance. Learn more at AAA.com/mobile.
Diesel
For the week, the national average remains at $3.70 a gallon. The record high is $5.816 set on June 19, 2022. The Oregon average adds one cent to $4.50. The record high is $6.47 set on July 3, 2022. A year ago the national average for diesel was $3.60 and the Oregon average was $3.93.
Find current fuel prices at GasPrices.AAA.com.