Nevada — known for its vast deserts and audacious gamblers — is luring Californians away from the Golden State at a higher rate than any other.

The Silver State leeched a net 81 Californians per 10,000 residents each year from California between 2016 and 2025, as California undergoes a mass exodus of residents leaving, according to a report.

The report, titled “Priced Out: RELOCATION AMIDST CALIFORNIA’S AFFORDABILITY CRISIS,” was released on March 31 by the nonpartisan California Policy Lab.

Californians move to Nevada at a higher rate than even Texas, the report notes.

“Nevada is the standout,” the report says. “News reports often mention Texas, but that is misleading. The most accurate measure of popularity adjusts for state population and shows a clear pattern: proximity reigns. Californians most often leave for nearby states, and California also welcomes new residents from neighboring states most frequently.”

Nevada is a much cheaper state for U.S. residents to live in than California. It has no state income tax, unlike California, and housing prices, along with gas prices, are also lower. California’s average regular gas price was $5.88 on Friday while Nevada’s was $4.99, an 89-cent difference.

 Evan White, a co-author of the study, says the Californians are leaving for more affordable states.

“The price tag has gone up on the California Dream, and many families are leaving the state for more affordable places,” White, the Executive Director of the California Policy Lab at UC Berkeley, said. “The difference these moves make is stark.  Their destination neighborhoods are half as expensive and they end up much more likely to own a home within just a few years.”

The report shows that out-of-state movers pay an average of $672 less per month on housing costs, and home prices are 48% lower. Former California residents are about 48% more likely to own a home in their new state.

Higher-income Californians are also leaving at increasingly higher rates, the report said. The share of higher-income Californians leaving has increased from 34% to 40% since the pandemic.

“Our report shows that people who leave California are increasingly leaving from higher-income neighborhoods,” co-author Dr. Brett Fischer, Researcher at the California Policy Lab, said. “These movers are, on average, in a weaker financial position than their neighbors, and may be moving to attain the quality of life they see their neighbors enjoying but they cannot afford.”

From 2010 to 2024, nearly 10 million people left California. The state is considered one of the most expensive states in the nation.

Idaho, Oregon, and Arizona are the next largest net recipients of Californians on a per-capita basis, the report says.

While the U.S. leads the world in crude oil production, California is not able to enjoy the bounty as much as the rest of the country. The Golden State—the fourth-largest economy in the world—essentially operates as an island sandwiched between the Pacific Ocean on one side and mountainous terrain on the other. That makes it difficult and expensive to build oil and fuel pipelines. A tougher regulatory environment and heightened fuel standards have also made the state’s refineries less economical over the years.

The bottom line is California must import a lot of its oil, gasoline, diesel, and jet fuel from Asia—a region that is itself currently struggling with shortages because of its reliance on Middle Eastern supplies.

And, in something of a perfect storm of unfortunate timing, the Iran war coincides with the recent shuttering of the Phillips 66 Los Angeles refinery and the April closure of Valero Energy’s Benicia refinery near San Francisco. The two complexes combined for nearly 20% of California’s oil-refining capacity. Valero also is weighing the future of its Wilmington refinery near Los Angeles.

“It’s real terrible timing for California to see the loss of two refineries at a time when Asia is struggling with oil supplies of its own,” said Patrick De Haan, head of petroleum analysis at GasBuddy.

“If we don’t have some concrete [peace] deal here in the next three weeks, then I’m really nervous for the West Coast this summer in terms of jet fuel,” De Haan told Fortune. “That’s not going to be great for California’s economy.”

Norse Atlantic Airways announced this week the cancelation of all its summer flights from Los Angeles International Airport (LAX). Delta Air Lines is canceling a handful of U.S. flights for now from Detroit to New York. Air Canada cut some flights to New York. United Airlines CEO Scott Kirby said in his April 22 earnings call that United is raising fares up to 20% and proactively canceling flights at off-peak times and days. And struggling Spirit Airlines—pushed over the cliff by the spike in fuel prices—may need a federal bailout to survive.

The biggest headline in Europe this week was German airliner Lufthansa axing 20,000 flights through October.

“It’s not so much gasoline supply on the West Coast that I’d be worried about yet, but it’s jet fuel out of LAX, San Francisco, Seattle, and then it’s diesel,” De Haan said, arguing that nationwide reductions, especially of new flight routes, are likely in order to conserve fuel. “I would look for a lot of route cancellations potentially this summer.”

Refineries primarily churn out gasoline to meet passenger vehicle demand, so supply shortages of refined products typically hit jet fuel first and then diesel. Washington, Oregon, Arizona, Nevada, Hawaii, and Alaska all stand to be among the most impacted as well.

Plans for new fuel and refined products pipelines into California are underway, including from Phillips 66, but the earliest those would come online is 2029.

The California Energy Commission told Fortune that jet fuel stocks remain adequate and within historic norms, although supplies are admittedly tight. For West Coast travelers, the near-term risks are sustained higher prices and airline schedule adjustments—not the physical shortfalls that Europe is facing.

But would that remain the case in June if the Strait of Hormuz energy chokepoint is still blocked? “Our analysis is thorough and ongoing, but we can’t provide a definitive answer on that kind of forecasting,” the CEC said.

One partially saving grace is the Trump administration’s decision to temporarily waive the 106-year-old Jones Act, which requires cargo ships moving between U.S. ports to be U.S. built, flagged, and manned, reducing the number of vessels available to move crude oil and refined products between domestic ports.

The waiver allowing more ships, for instance, to move fuel from the U.S. Gulf Coast through the Panama Canal and up to California to help alleviate shortfalls. The CEC confirmed the waiver is bringing incremental supply to the state.

Looking ahead for relief

While the White House previously touted the Jones Act waiver as a move to lessen the spikes in fuel prices—that impact is minimal—the bigger difference it’s making is the eased logistical movement of supplies to needier domestic areas.

A White House official said California and Alaska count among the biggest beneficiaries of jet fuel deliveries from the Jones Act waiver. And the 60-day waiver could be extended.

Otherwise, California must compete internationally for more expensive and increasingly scarce fuel imports from Asia. The state leans on South Korea, Singapore, Japan, India, and the Middle East for more of its oil and fuel.

“The risk is California has to compete on price to get those barrels, and what’s an already expensive market becomes really expensive,” said oil forecaster Dan Pickering, founder of Pickering Energy Partners consulting and research firm.

While the rest of the country is worried about fuel prices and not physical shortages, California is a “different animal,” Pickering said, “The risk in California is both its price and its availability. And, because availability is tough, the price goes up even more.”

Already, California’s gasoline prices are 45% above the national average. The national average on April 23 for a gallon of regular unleaded was $4.03, while it’s a U.S.-leading $5.85 in California. And there’s a $2 gap between diesel prices in California compared to the national average, $7.49 per gallon versus $5.47.

Despite the geographical and regulatory challenges of building new fuel pipelines to California, several projects have popped up to help fill the gaps left by the refinery closures.

Phillips 66 and Kinder Morgan plan to build the Western Gateway Pipeline System from Texas to Phoenix and southern California. Pipeline developers ONEOK and HF Sinclair are both weighing competing projects.

But the Western Gateway project isn’t slated for completion until 2029, so bridging that gap will prove to be the challenge, De Haan said.

“It’s great news for California because they’ll have better-connected markets,” De Haan said. “California will be a little bit less of a petro island.”

Kinder Morgan CEO Kim Dang said on the company’s earnings call this week that the war in the Middle East highlights the need for the project.

“California has to import some of its supply, and that makes it subject to the variability in global markets,” Dang said. “Instead of bringing in a fair amount of product over the water, they’ll now be bringing in supply from Texas and from the eastern United States. The other thing it does is it serves the Phoenix market, which is also right now reliant on the California refining capacity.

“I think it’s a great solution for California and for Arizona to be able to access domestic supply, as opposed to having to be reliant on the international market,” Dang added.

In the immediacy though, Pickering fears the world is still “dangerously complacent” about the war and the greatest energy supply shock in history. Oil and fuel shortages are almost guaranteed at least through the end of this year, and Pickering doesn’t see a peace deal occurring overnight.

“If they don’t [make a deal], in a month or two, the problems that we’re seeing in Asia are going to be everywhere,” Pickering said. And, if June is when shortages really kick in, well, “June is a day closer every day.”