Oil companies ‘profiteering off’ of Iran war, Steyer says in letter to Newsom, CARB
Tom Steyer, the billionaire California candidate for governor, sent a letter to Gov. Gavin Newsom and California Air Resources Board Chair Lauren Sanchez on Monday urging the state to adopt strengthened Cap-and-Invest measures — California’s marquee climate policy aimed at limiting greenhouse gas emissions — and to stand against oil companies’ efforts to “dismantle” the program’s intent.
In a strongly worded letter, Steyer criticized the Trump administration and accused Big Oil of attempting to profit from the Iran war while emphasizing the importance of upholding the program’s goal of cutting emissions despite the conflict.
“Big Oil is trying to extort our state into backtracking on climate ambition. Federal rollbacks and devastating wars disrupting our energy markets make clear that California must continue to lead the way on climate action,” Steyer said.
“They're profiteering off of a war Trump started while trying to dismantle the most effective program in the country to regulate their emissions and redistribute their profits to Californians harmed by their pollution.”
The Iran war has caused major disruptions in global oil supply, with shipping through the Strait of Hormuz, a key route for roughly 20% of global oil trade, closed amid ongoing hostilities. The oil supply crisis has pushed both environmental advocates and the oil and gas industry to call for energy security, though from diverging standpoints.
Since the start of hostilities in late February, oil prices have surged roughly 50% amid disruptions to global supply, according to Reuters. The spike has pushed average U.S. gasoline prices above $4 per gallon through much of April, up from just under $3 in February and well above the roughly $3.25 peak over the past year, according to GasBuddy.
The current average price for a gallon of regular unleaded fuel in Sacramento is $5.79, down slightly from a week ago but still higher than $5.37 a month ago and $4.97 a year ago, according to AAA data. Prices remain below the capital region’s all-time high of $6.44, set in June 2022. Statewide, the average cost for a gallon of gas is hovering around $5.89, according to AAA data.
The price increases have rattled financial markets and raised concerns about prolonged energy volatility, particularly as tensions in the Gulf threaten one of the world’s most critical oil transit routes. Analysts and policymakers have warned that continued instability could keep fuel costs elevated in the months ahead.
Environmental groups, including NextGen California, have pointed to that market instability as evidence of the need to scale clean energy and reduce fossil fuel dependence, while the oil and gas lobbying group Western States Petroleum Association has warned that a more restrictive Cap-and-Invest program would drive out more refineries from California and increase reliance on imported oil.
“The situation in Iran underscores the consequences of getting this wrong — if this plan drives refineries out of state and makes us more dependent on imported fuels, we become even more vulnerable to price volatility caused by supply disruptions,” Jim Stanley, a spokesperson for the lobbying group said in March. California has six major refineries remaining, with Valero’s Benicia refinery scheduled to wind down in April.
In a letter to Newsom in February, the Western States Petroleum Association warned that the current draft of the program could drive refiners’ compliance costs up to $9 billion over the next decade. PBF Energy, which operates two of the remaining six major refineries in California, sent a letter to Sanchez warning that it will be “forced to address the viability of our in-state operations, along with every other refiner in the state.”
In Monday’s letter, Steyer warned against the industry’s rhetoric, framing clean energy as part of a broader global economic race while calling for California to embrace full electrification.
“This is not just a matter of climate, but of California’s sovereignty,” Steyer continued. “Oil lobbyists are doing this because they are scared. They know the writing is on the wall for their industry and the criminal they put in the White House,” Steyer continued.
The letter came a day before California’s air regulators were set to release draft updates to the Cap-and-Invest program, with stakeholders anticipating additional changes to the initial January updates.
The program works by requiring companies to purchase emissions allowances, with revenue returned to ratepayers through bill credits or rebates. The crux of the program, and where tensions are rising, centers on the total pool of allowances. From the industry’s perspective, removing 118 million emissions allowances is too steep a reduction. From environmental groups’ perspective, it falls short of their expectations.
The current version of the program would remove 118 million emissions allowances from the total pool, with each allowance accounting for a permit to emit one metric ton of greenhouse gases in carbon dioxide equivalent — and one metric ton of CO2 is roughly equivalent to about one-quarter of the annual emissions from an average passenger gasoline vehicle. Environmental groups want to reduce the number of total allowances, while the oil and gas industry hopes to see them increased.
“Long-term, the only way to solve our energy crisis is by scaling clean energy and decarbonized technology to become a fully electrified state independent of the whims of Washington or the Middle East,” Steyer said.
“Affordability cannot be used as a justification for undercutting Cap-and-Invest’s effectiveness; done right, a strong program is part of the solution to long-term cost pressures facing Californians.”
This story was originally published April 13, 2026 at 7:50 PM with the headline "Oil companies ‘profiteering off’ of Iran war, Steyer says in letter to Newsom, CARB."
