California’s petroleum market watchdog is warning about price gouging at some gas stations charging over $7 or even $8 a gallon as the Iran war sends oil prices soaring.

The average price of gas in California is currently $5.66, but as of Friday, a Chevron station in Essex is charging $9.69, another in Los Angeles’ Chinatown is charging $8.71, and one in Vidal Junction is charging $7.79, according to GasBuddy, which tracks prices across the country.

“Our team is vigilantly monitoring the retail, wholesale, and spot markets,” said Tai Milder, director of the California Energy Commission Division of Petroleum Market Oversight, in a statement. “Any reports of unfair practices or market manipulation will be taken seriously, and we will not hesitate to refer any illegal conduct for further investigation and prosecution.”

Gas prices have jumped some 30% nationally since the U.S. and Israel attacked Iran three weeks ago and Iran blocked 20% of the global oil supply. Californians, who already faced prices over $1 per gallon higher than the national average, are especially feeling the squeeze.

The extremely high prices at some gas stations in California “are not supported by current crude oil prices or gasoline futures,” the division said.

California’s oil and gas watchdog division was created in 2023 to provide greater insight into the state’s petroleum market after summer gas price spikes exceeded $6 per gallon two years in a row.

The state consistently sees the highest fuel prices in the country due to state taxes and fees, environmental programs, a cleaner fuel blend requirement and an isolated petroleum market, where 80% of gasoline comes from in-state refineries.

This isolation makes California gas prices more sensitive to refinery outages and market manipulation. In 2024 the division reported that, after accounting for environmental rules and taxes, Californians still pay an extra 41 cents more per gallon and the largest share of that goes to industry profit. They also found that the price spikes of the previous two years were caused by refineries going offline without backup supply and “potentially manipulative trading” in those under-supply conditions.

Lawmakers and regulators have been more quiet about price gouging of late and the energy commission put a decision to impose a profit cap on refiners on hold after a series of refinery closures raised concerns about future fuel supply shortages.

Jamie Court, the president of the nonprofit ratepayer advocacy group Consumer Watchdog, said the fact that the gap between national and California prices has widened since the start of the war is evidence of price gouging.

“We know they made 49 cents per gallon in January,” said Court, of the refineries. “We know now that their margins are closer to $1.25 per gallon,” he said, citing the group’s analysis of state and Oil Price Information Service data.

Chevron said in a statement that most of its gas stations are owned and operated by independent business people who are “free to set the retail price of fuel and other products.”

“Those costs are generally determined by fundamental economic forces like demand, supply and competition,” said spokesperson Ross Allen, who added that crude oil prices, which make up the bulk of gas prices, have gone up but California’s taxes and environmental fees can also add over $1.20 a gallon.

Valero, Marathon Petroleum, and Shell did not respond immediately to requests for comment.

The petroleum oversight agency said it reached out to stations where pricing appears “excessive and disproportionate to increases in those sellers’ costs” including “multiple stations in Los Angeles and San Bernardino counties, in addition to multiple stations in Northern California” since the war began.

It also encouraged Californians “to shop around and compare prices between name-brand and unbranded (or generic) gasoline.”

“While retailers typically charge more for branded gasoline, all gasoline sold in California must meet the state’s high standards for emissions control and engine performance,” read the statement.

At least 37 energy oil refineries, natural gas fields and other energy sites in nine countries have been damaged since the United States and Israel began bombarding Iran, a New York Times analysis found. Some have been struck by drones. Several have been hit more than once.

As the attacks escalate, both sides increasingly view energy as a potent target — one that is capable of inflicting severe economic pain. Iran depends on oil and natural gas to keep the lights on and its government running, while the United States wants to prevent prices from soaring further and damaging the underpinnings of the global order.

The question is no longer just when Iran’s tight grip on the Strait of Hormuz, a narrow but critical passage on its southern coast, will ease enough for most ships to pass. It is also how long it will take to complete repairs needed to produce and process oil and natural gas in the first place.

“The longer this war goes on, the more likely it is that the two sides are going to play their strongest energy-leverage cards,” said Clayton Seigle, an energy expert at the Center for Strategic and International Studies, a Washington research group. “The attacks on facilities are not easily reversible.”

To count the number of attacks and disruptions at energy facilities in the region, The New York Times reviewed statements from government, state-run and private energy companies. The Times also reviewed lists compiled by ClearView Energy Partners and the Institute for the Study of War, two research firms, and subsequently verified their findings.

Through Friday, The Times had found a total of 45 attacks, though there is no official accounting and more may have occurred. Strikes occur seemingly every day.

The importance of energy in the war became even clearer after Israel struck facilities tied to Iran’s South Pars gas field on Wednesday. Iran responded by lashing out across the Gulf. At least 10 sites were damaged this week, The Times found, including an energy hub in Qatar, as well as oil refineries in Kuwait, Saudi Arabia and Israel.

The various attacks sent oil and natural gas prices soaring as traders worried that much of the Gulf’s energy could remain effectively landlocked for a while, possibly months. Brent crude, the international oil benchmark, briefly topped $119 a barrel on Thursday morning before retreating. Oil fetched less than $73 a barrel before the war started on Feb. 28, a price that reflected the possibility of a war.

“It’s been the cumulative effect that’s really driven this crisis,” said Raad Alkadiri, a Washington-based political risk analyst who specializes in energy and the Middle East.

While oil has been front and center, analysts are especially concerned about the damage to the world’s largest natural-gas export terminal, called Ras Laffan, on Qatar’s coast.

The sprawling facility, which is operated by the state-owned QatarEnergy company, cools natural gas into liquid that can be loaded onto tankers and shipped. But Qatar said on the third day of the war that it had stopped producing liquefied natural gas, citing military attacks.

This week’s strikes caused further damage, compromising 17 percent of the country’s L.N.G. export capacity, QatarEnergy said on Thursday, adding that repairing the damage could take up to five years.

There is no easy replacement for that fuel, which is used to generate electricity and heat homes. And there is little spare L.N.G. capacity in other countries.

Other points of vulnerability include the oil export terminals where the United Arab Emirates and Saudi Arabia are rerouting oil to avoid the Strait of Hormuz. One of those areas, in the Emirates, was targeted as recently as this week. A refinery near the other, in Saudi Arabia, was also hit by a drone.

“It could become a lot worse if the craziness continues to prevail,” said Charif Souki, a former chief executive of Houston-based Cheniere Energy, a large L.N.G. company. “But there are so many people who have a vested interest in not letting it get too far out of hand.”

Indeed, countries around the world have agreed to release oil from emergency stores to stem rising prices. The U.S. military is also attacking Iranian vessels and drones to try to clear the Strait of Hormuz, and the Trump administration said it would lift sanctions on Iranian oil to nudge prices down.

In many cases, it is hard to know how severe the damage has been to a facility.

As Kevin Book, managing director of ClearView Energy Partners put it, “The last thing they probably want to do is tell Iran, ‘You missed me, try again.’”

Even when companies have been more forthcoming, their disclosures have sometimes only raised more questions.

Mr. Souki said he was surprised to hear that QatarEnergy expected it would take up to five years to repair its L.N.G. facilities. “I think he’s hedging his bets at the moment,” Mr. Souki said, referring to QatarEnergy’s chief executive. “You can always give good news later.”

Artificial intelligence powerhouse Anthropic’s battle with the Pentagon has sparked some soul-searching in Silicon Valley that could reshape the tech sector’s complicated relationship with war and the White House.

Anthropic is the San Francisco-based startup behind the chatbot Claude and some of the most powerful AI on the market. In its negotiations with the military, it has demanded guardrails on how its technology is used.

The military said it refused to be beholden to a corporation and pushed back, labeling Anthropic a threat akin to an enemy foreign power and blocking it from some government contracts.

Tech leaders have quietly backed Anthropic, saying that AI isn’t ready for some weapons and that strong-arming companies is counterproductive and antidemocratic. President Trump called Anthropic a bunch of “left-wing nut jobs.”

How this showdown plays out will affect not only Anthropic’s booming business but also the way tech titans and other corporations work with an administration known for lashing out at resisters, said Alan Rozenshtein, an associate professor at the University of Minnesota Law School.

“On the one hand, it could cause the government’s other Silicon Valley suppliers to be more compliant, lest they be treated like Anthropic has been,” he said. “On the other hand, it could lead more companies to avoid doing business with the government at all to avoid the risk of something like this happening to them.”

As some tech trailblazers in recent years have become more comfortable with developing weapons, Southern California has emerged as a hub for defense tech startups. With a long history in defense, it has the factories, engineers and aerospace expertise to turn venture funding and military demand into weapons, satellites and other advanced systems.

The fallout from Anthropic’s showdown with the Trump administration will help determine the local winners and losers in the sector in the coming years.

While many of the key players in tech have been reluctant to join the brawl in a high-profile manner, the positions on different sides are laid out in a court case that Anthropic has pursued to get off the Pentagon’s blacklist.

Anthropic filed the lawsuit in the U.S. District Court in the Northern District of California and a petition for review in the U.S. Court of Appeals for the District of Columbia Circuit on March 9. The company is asking the court to overturn its designation as a “supply chain risk” and block the Trump administration from enforcing the government’s ban on its technology.

“The consequences of this case are enormous,” Anthropic’s lawsuit said. “The federal government retaliated against a leading frontier AI developer for adhering to its protected viewpoint on a subject of great public significance — AI safety and the limitations of its own AI models — in violation of the Constitution and laws of the United States.”

Some of Anthropic’s biggest concerns are that its technology could be used for government surveillance or autonomous weapons. It has been asking for assurances in the wording of its contracts that its AI would not be used for these purposes. While the government said it would not use the tech for those purposes, it was unable to provide Anthropic with the assurance it wanted.

Tech industry groups, Microsoft and workers from Google and OpenAI have backed Anthropic in its legal fight against the Trump administration, adding their own views to its case.

On Tuesday, lawyers for the U.S. government said in a court filing that the Defense Department started to wonder whether Anthropic could be trusted.

“Anthropic could attempt to disable its technology or preemptively alter the behavior of its model either before or during ongoing warfighting operations, if Anthropic — in its discretion — feels that its corporate ‘red lines’ are being crossed,” the government said in the filing.

The Department of Defense and Anthropic declined to comment.

The tech industry has a long, complicated history of working with the military. In the 1960s, the Department of Defense developed the internet’s predecessor, ARPAnet, to help keep military and government computers secure.

For much of this century, the big tech companies, as well as their investors, have often tried to avoid developing or promoting things that helped spy on people or kill them. Google, once known for its motto “Don’t Be Evil,” didn’t renew a controversial Pentagon contract, Project Maven, in 2018 after thousands of workers protested over concerns that AI would be used to analyze drone surveillance footage.

That has changed in recent years as there has been more money to be made in tech fixes for military problems.

Benjamin Lawrence, a senior lead analyst at CB Insights, said that advancements in AI and major events, such as Russia’s invasion of Ukraine in 2022, helped fuel a surge in venture capital investment in defense tech.

“It caused a huge shift with a lot of traditional investors looking at defense tech in a more positive light because you have a sovereign democratic nation that was invaded,” he said.

The world’s most powerful tech companies have been partnering with defense tech startups and securing government contracts.

Google has been offering AI tools to civilians and military personnel for unclassified work. The Department of Defense also awarded a $200-million contract to Google Public Sector, a division that works with government agencies and education institutions, to accelerate AI and cloud capabilities.

The industry’s allegiance with the White House and its military ambitions was strengthened with the arrival of the second Trump administration. Many of the top executives of the tech world have been supporting and advising Trump.

The recent strong-arming of one of the thought leaders of the AI revolution, however, has given many pause. Some of the resistance echoes the earlier era when the tech industry was suspicious of how governments would use its innovations.

The tech industry finds itself in a tricky spot after Anthropic’s clashes with the Pentagon. In late February, the public feud escalated after Trump assailed Anthropic and ordered government agencies to stop using its technology. His administration labeled Anthropic a “supply chain risk,” prompting the company to sue.

Trump’s actions could jeopardize hundreds of millions of dollars in contracts it has with private parties, according to Anthropic’s lawsuit. Federal agencies have started to cancel contracts.

Last week, tech industry groups such as TechNet, whose members include Anthropic, Meta, OpenAI, Nvidia, Google and other major companies, said in an amicus brief that blacklisting an American company “engenders uncertainty throughout the broader industry.”

“Treating an American technology company as a foreign adversary, rather than an asset, has a chilling effect on U.S. innovation and further emboldens China’s efforts to export its own government-backed AI technology,” the brief said.

Microsoft has also backed Anthropic, urging the court to temporarily block Trump from blacklisting the AI company. Labeling Anthropic as a supply chain risk means that Microsoft and other government suppliers will have to use “significant resources” to determine how excluding Anthropic would affect their contracts.

The U.S. government said in its filing that its concerns with Anthropic focus on its conduct and are unrelated to its speech. But Anthropic and the tech industry say the move would hurt their businesses.

In addition to Trump’s harsh criticism of the company, Secretary of Defense Pete Hegseth accused Anthropic of delivering a “master class in arrogance and betrayal.”

Anduril’s founder, Palmer Luckey, backed the Pentagon’s position, stating that it should be elected officials, not corporate executives, making military decisions. Anthropic countered, stating in a blog post it “understands that the Department of War, not private companies, makes military decisions.”

As this battle plays out, some experts say Anthropic would probably have an upper hand in court.

In its lawsuit, Anthropic said the Trump administration violated a law for labeling a company a supply chain risk, noting it doesn’t have ties to a U.S. “adversary,” such as China or Iran.

Anthropic also said the Trump administration retaliated against the company for its speech and other protected activities, violating the 1st Amendment.

“They’re just lashing out,” said Rozenshtein of the University of Minnesota Law School. “I think that’s a lot of what this is.”