Alaska Energy Crisis: Fuel Prices Soar Amid US-Iran War
John Stelling had just dialled up the price at his petrol pump to US$9.10 in his remote Alaska community when he realised he had a problem. He doubted whether his machine could handle a double-digit price if costs continued to climb. “I’m not sure this machine can handle that,” he said of the possibility of fuel reaching US$10 per gallon.
In the Alaskan interior, the impact of the US-Iran war has triggered the highest fuel prices in the United States. Remote towns and villages not connected to the road system must pay a significant premium for petrol, heating oil, and diesel to generate electricity.
The situation in Alaska is a paradox. Although the state possesses abundant fossil fuel resources and is central to President Donald Trump’s energy agenda, residents in the interior are being squeezed. The US-Israel war with Iran has made energy security a primary global concern, but for Alaskans, it means an unbearable economic burden.
Fuel typically arrives by barge during the summer when the ice melts. The last delivery sets the price until the next shipment months later. Many remote communities were forced to order supplies last spring, just as the Iran war sent oil prices soaring. Governor Mike Dunleavy stated that the small scale and vast distances of the Alaskan interior work against its residents. “This could be a tough autumn and winter,” he said.
Although Alaska is the fifth-largest oil producer in the US, most of its crude is shipped overseas. Due to limited road infrastructure and federal laws restricting foreign vessels from transporting goods between US ports, it is often cheaper for Alaska to import fuel from countries like South Korea than to buy it from local refineries. In Dillingham, petrol and heating oil prices have reached around US$9 per gallon. City manager Jack Savo Jr. noted that a breakthrough in US-Iran peace talks would not provide instant relief, as prices in their region do not react quickly to changes in the world market.
Meanwhile, the Trump administration continues to push for a “Great Alaskan Revival” by accelerating oil production on the North Slope. Major projects like Pikka and Willow are expected to reverse the decline in Alaska’s oil output. Giants such as ConocoPhillips, Repsol, and Exxon Mobil are investing billions of dollars in drilling rights. However, Tom Atkinson, a former electric utility executive in Kotzebue, believes the oil and gas development has not yet truly benefited the communities most in need of energy cost savings.
This energy crisis is beginning to erode support for Trump in the interior and has become a central issue in the Senate election between Republican incumbent Dan Sullivan and Democratic challenger Mary Peltola. Peltola, who supports new oil projects but has pledged to lower the cost of living, is starting to attract voters who feel burdened by the current administration’s policies. In the village of New Stuyahok, the price of petrol has even touched $10 per gallon, causing the cost of other essential goods to double. For residents like Justin Askoak, a fuel distributor in New Stuyahok, the situation is deeply worrying. “Everything we buy costs twice as much, and it all comes down to one point, one administration,” he concluded.