The U.S. Oil & Gas Association (USOGA) publicly criticized Rep. Ro Khanna, D-Calif., for attributing high gas prices in his district to President Donald Trump's actions regarding Iran, specifically referencing what Khanna called 'Trump's immoral and reckless war in Iran' [1]. Khanna claimed that gas prices in his Santa Clara, California district had risen to nearly $6 a gallon, blaming the 'illegal and immoral war in Iran' and advocating for a windfall profits tax on Big Oil to provide rebates to consumers [1].
USOGA President Tim Stewart responded directly to Khanna via X, arguing that California's high gas prices are primarily due to state-level policies, including nearly double the national average in state taxes, cap-and-trade, Low Carbon Fuel Standard, unique reformulated gasoline requirements, refinery limits, and geographic isolation, which collectively add $1.00–$1.78+ over the U.S. average price [1]. Stewart dismissed Khanna's proposal for a windfall profits tax, citing historical evidence from the 1980 federal windfall profits tax, which reduced domestic production, increased imports, and generated less revenue than expected before its repeal [1].
Stewart further contended that suspending state-level taxes and encouraging domestic oil and gas production, as well as expanding refinery capacity, would be more effective in lowering prices than implementing additional taxes. He warned that repeating windfall profits tax policies would shrink U.S. output and raise consumer costs, referencing California's recent 'wealth tax' and its impact on high net worth individuals leaving the state [1].
Khanna has recently reintroduced the Big Oil Windfall Profits Tax Act, framing it as a measure for consumer relief, but USOGA maintains that such policies historically fail to deliver the intended benefits and instead exacerbate price increases and supply issues [1].
CONCLUSION
The debate over California's high gas prices centers on whether state policies or international events are to blame, with USOGA strongly opposing Rep. Khanna's attribution to the Iran conflict and his proposed windfall profits tax. The association argues that state-level taxes and regulations are the primary drivers of elevated prices, warning that further taxation could worsen market conditions. The market takeaway is a continued focus on policy-driven price impacts rather than geopolitical events.