Alaska has seen this movie before: oil prices spike, politicians celebrate and Juneau starts figuring out how fast it can spend the money.
The U.S. attack on Iran has pushed global oil prices higher, rattling energy markets and sending crude prices upward as supply fears ripple through the global economy. Energy markets surged as tanker disruptions and facility shutdowns across the Middle East threatened supply — a reminder that geopolitical shocks can move oil prices overnight.
For Alaska, that means something very specific: more money. But before Gov. Dunleavy and the Alaska Legislature start eyeing a fresh pile of cash like kids staring at a cookie jar, let’s get something straight. This is not prosperity. This is a temporary windfall driven by war.
And if the past is any guide, Juneau has a good chance to screw it up.
[Related news coverage: Spike in oil prices will boost Alaska revenue, but not enough to cover projected deficit]
Oil prices jumped sharply after the U.S. and Israel attacked Iran on Feb. 28, and analysts say prices could climb even higher if the conflict drags on. Some forecasts suggest oil could exceed $100 per barrel, which could mean roughly $1.5 billion more in revenue for Alaska in the coming year, according to reporting by the Juneau Empire.
That kind of money would erase much of the state’s budget deficit and could even fund a dividend north of $3,000.
Cue the political stampede.
In an election year especially, there will be lawmakers eager to promise giant Permanent Fund dividends fueled by this sudden surge in oil revenue. Expect campaign ads. Expect grandstanding. Expect speeches about “returning the wealth to the people.” And even before the attack on Iran, Gov. Dunleavy was already pushing an unsustainable full dividend for each Alaskan.
It’s a stupid idea — not because Alaskans don’t deserve dividends but because temporary revenue should never be used to make permanent promises. War-driven oil money is the worst possible revenue on which to build promises.
Alaska’s finances remain wildly exposed to oil price swings. A single dollar change in oil prices can move the state budget by roughly $25 million to $35 million, according to Alaska Public Media.
That volatility is exactly why treating a war-driven price spike as stable revenue is fiscal stupidity.
Even lawmakers watching the markets closely say the state should not assume the spike will last. As legislative leaders told Alaska Public Media, Alaska cannot build its spending plans around overly optimistic oil prices. Yet history tells us that when oil money shows up unexpectedly, discipline in Juneau disappears faster than reindeer sausage at the Tanana Valley State Fair.
The last time a global conflict sent prices soaring was after Russia invaded Ukraine in 2022. Oil shot above $100 a barrel for months. What did Alaska do? The Legislature and governor approved a massive dividend and energy payments totaling more than $2 billion. The state spent the money almost as fast as it arrived — don’t we wish we had those billions today?
Like any temporary high, it felt good at the time, and politically, it was wildly popular. It also did absolutely nothing to solve Alaska’s long-term fiscal problems.
The state’s spring revenue forecast arrives in about two weeks. If oil prices remain elevated, the numbers will suddenly look far healthier than they did a month ago.
That’s when it gets tempting. Lawmakers will start talking about “surplus revenue.” Candidates for public office will promise bigger dividends. The governor’s allies will argue the state can suddenly afford everything. Don’t fall for it.
As longtime Alaska fiscal analyst Larry Persily recently wrote in the Alaska Beacon, rising oil prices quickly create a long list of spending ideas in Juneau. But the real question isn’t how much money might arrive — it’s how long it will last. And nobody knows the answer to that. War-driven oil spikes can disappear just as quickly as they arrive.
If Alaska receives a revenue windfall from this conflict, the state should treat it for what it is: a one-time shot in the arm.
That means save it, invest it and strengthen the state’s fiscal stability.
Deposits into reserves like the Constitutional Budget Reserve — or even better, the Permanent Fund — would help rebuild the savings Alaska burned through during the last decade of deficits. Strategic investments in infrastructure, education and economic development would strengthen the state long after oil prices fall again.
What Alaska should not do is hand the entire windfall to voters as a massive dividend. That’s not fiscal policy. That’s a sugar rush.
There is nothing wrong with Alaskans benefiting when oil prices rise. Oil built this state, and its revenues still help pay for essential services. But relying on war-driven price spikes to fund giant dividends is reckless.
This moment will test the discipline of Alaska’s leaders. The attack on Iran may deliver Alaska a sudden burst of revenue. But the state’s long-term problems — structural deficits, unstable revenue and growing needs — will still be there long after oil prices settle down.
So here’s the message the governor and the Legislature need to hear: If this windfall arrives, don’t blow it the way you did last time.
Save it. Invest it. And for once, resist the urge to torch the cash in the middle of an election year.
WHEREAS, all Alaskans have the right to safety and justice, and the rates of missing and murdered Indigenous persons (MMIP) represent a crisis that is actively being addressed; and
WHEREAS, Alaska Native women are overrepresented in the domestic violence victim population by 250 percent, and although Alaska Natives comprise 19 percent of Alaska’s population, they represent 47 percent of the State’s reported rape victims; and
WHEREAS, the call for a greater response to the MMIP led to increased communication between tribal communities and State agencies in an effort to better understand the scope of the issue; and
WHEREAS, the State of Alaska now has four MMIP investigators, two tribal liaisons, and dedicates significant resources to address these cases and work with the family members of missing and murdered persons; and
WHEREAS, in 2024 I signed legislation that further moves Alaska’s response forward with mandatory entry of missing persons into the National Missing and Unidentified Persons System, and requires that the State employ MMIP investigators, and requires that all current and future Alaska law enforcement officers attend cultural diversity training with an emphasis on MMIP; and
WHEREAS, the State of Alaska is committed to continuing its efforts to work with Alaska Tribes in combatting this crisis and offering support to communities and families.
NOW THEREFORE, I, Mike Dunleavy, GOVERNOR OF THE STATE OF ALASKA, do hereby proclaim May 5, 2026, as:
Missing and Murdered Indigenous People Awareness Day
in Alaska and encourage all Alaskans to recognize the elevated rates of missing and murdered Indigenous persons and support law enforcement, victim advocacy, and the efforts of Alaska Native Tribes to work with State, local, and other entities working together toward solutions.
Dated: May 5, 2026
The letter, from Director of White House Intergovernmental Affairs Alex Meyer, underscores federal recognition of Alaska’s efforts to modernize its tax framework for liquefied natural gas (LNG) development and highlights the importance of these reforms to advancing American energy security and economic growth.
In the letter Meyer said, “Given the scale and complexity of AKLNG, a stable and competitive policy environment is critical to the project’s success. Clear and predictable tax policy will improve feasibility, attract private investment, and help secure final commitments. This approach promotes job creation, expanded economic activity, and durable public revenue.”
“Alaska has long been a cornerstone of America’s energy future, and this support from the White House affirms the importance of getting our LNG tax policy right,” said Governor Dunleavy. “HB 381 and SB 280 provide a clear, predictable, and competitive structure that will help unlock Alaska’s vast natural gas resources, create jobs, and deliver long-term benefits for our state and the nation.”
The volumetric LNG tax bills establish a straightforward tax system based on the volume of gas produced, offering greater certainty to investors and developers and ensuring Alaskans benefit from a secure, low-cost supply of energy.
Governor Dunleavy emphasized that alignment between state and federal leadership is critical to advancing major energy infrastructure projects like Alaska LNG.
“We appreciate the Administration’s recognition of the role Alaska can play in strengthening domestic energy production and supporting our allies abroad,” Dunleavy added.
The Governor continues to work with members of the Alaska Legislature, industry stakeholders, and federal partners to move these bills forward and position Alaska as a global leader in LNG development.
An Alaska woman is accusing the Alaska Department of Public Safety, two Alaska State Troopers and the A&E Television Network of compromising her privacy and safety as a confidential informant after they filmed an arrest without her consent.
The woman, identified in the filings as Jane Doe, says that she received death threats after she was a confidential informant whose information led to an arrest that was filmed and later aired on the Alaska State Troopers reality show.
Alaska Beacon is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Alaska Beacon maintains editorial independence. Contact Editor Claire Stremple for questions: info@alaskabeacon.com.
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