DILLINGHAM, Alaska—John Stelling had bumped his fuel pump points up to $9.10 at his gas station in this remote Alaska community when he realized he had a problem. Can he raise the meter to $10 if he has to?
“Not sure whether it will be able to handle them,” he said of fuel prices in the double digits.
In rural Alaska, the war with Iran has caused fuel prices to be the highest in the country. Remote towns and villages are not connected by road systems, so they pay huge premiums to buy gasoline, heating oil and diesel for electricity.
Fuel usually comes from barges in the summer, when the waterways are cleared of ice. The last barge to unload sets the price until the next delivery – months away. This year many communities had no choice but to place their orders in the spring, as prices had risen due to the Iran war.
This means that even if the US and Iran reach a peace deal and the Strait of Hormuz reopens permanently, rural Alaskans will continue to struggle with sky-high energy prices for a long time. come down For the rest of the country.
“The small scale of rural Alaska works against them, the remoteness works against them,” Governor Mike Dunleavy said in an interview. “This could ultimately lead to a difficult fall and winter.”
This is a paradox given the plight of Alaska vast fossil-fuel resources-And it has a place at the center of President Trump’s energy agenda. The Iran war has made energy security a paramount concern for countries around the world. For the Trump administration, the conflict has reinforced its intention to establish dominance over energy resources from Alaska to the Western Hemisphere. to venezuela.
The Trump administration has hailed a new era of crude oil production and low energy prices in Alaska. Reviving the sagging fortunes of the state’s oil industry could bring huge opportunities for ConocoPhillips, Repsol, Exxon Mobil, Shell and other companies to expand in the state.
But while Trump’s support for the industry is set to benefit his fossil-fuel allies, some residents are dusting off their wood stoves in preparation for next winter.
“In many ways, oil-and-gas development really hasn’t reached the people who really need it most to see the savings it brings,” said Tom Atkinson, the recently retired chief executive of an electric utility in the rural town of Kotzebue.
Trump won Alaska by double-digit margins in each of the last three presidential elections, but voters in rural communities are becoming more upset over the war with Iran, creating divisions in the deep red state that could have national ramifications.
Votes of rural communities can be decisive key senate races Political observers expect a tie between former Democratic U.S. Representative Mary Peltola and outgoing Republican Senator Dan Sullivan. “A Peltola victory would improve Democrats’ long-term chances of retaking the Senate.”
A White House spokesperson said Trump’s priority is to “unleash the state’s abundance of reliable, affordable and secure energy by increasing production and building critical infrastructure to lower prices in Alaska.” He said the administration’s energy policies will create new jobs in the state.
$9 per gallon
Trump has emphasized on America during Iran war can withstand energy shock Because it is the world’s largest oil and gas producer. His efforts to reduce the magnitude of the disruption reassured crude oil markets, and largely Release of crude oil from global reserves Helped prevent a sharp increase in gasoline prices. The national average peaked at $4.56 a gallon in May and has since fallen to $3.80.
However, Alaska may also be a separate country. Although it is the fifth largest oil producing state in the country, most of its crude oil is shipped abroad. The portion refined into usable fuel is distributed to local communities, mostly via truck. Partly because most of Alaska’s communities are not connected by roads, and a federal statute prevents foreign ships from carrying cargo between U.S. ports, it is often cheaper for them to ship fuel from other countries than to buy it from the state’s three main refineries.
Remote villages pay for the fuel — then it has to pay $1 to $2 per gallon to be transported by tanker, loaded onto a barge, transferred to a tugboat that can navigate a narrow river and finally loaded into storage tanks.
“It’s much cheaper to get a foreign tanker and load it in Korea and bring it to Alaska than it is to buy a gallon at an Alaska refinery,” said Mark Smith, an independent fuel-logistics expert.
In Dillingham, a coastal town in western Alaska, boats have started arriving and with them, fuel prices have also increased. The area is home to three gas stations, including Stallings, all of which sell gasoline at around $9 a gallon. Heating oil sells for about the same price, and diesel for slightly more.
City Manager Jack Savo Jr. said recent breakthroughs in negotiations between the U.S. and Iran and the possibility of reopening Hormuz provide some comfort. Dillingham estimates it will need to spend an additional $166,015 in the 2027 fiscal year to heat buildings and fuel vehicles. It would reduce overtime and suspend some merit increases, along with other cost-cutting measures.
“Our prices don’t react immediately to changes in the market and things that happen in the world,” Savo said.
Originally settled by Alaska Natives, the area was known as Nushagak until 1837, when a Russian Orthodox mission was established there. Today, it has about 2,000 residents, a hospital, and a small airport. In the summer, fishermen flock to Bristol Bay for the world’s largest sockeye salmon run in the area.
Anushka Tilden, 67, was working on a jigsaw puzzle at the local senior center one recent morning. She said it cost her $1,000 a month to heat her three-story home last winter, which she paid for with the $1,483 she receives each month in Social Security benefits. She is worried about next winter and is thinking about getting a part-time job to pay her bills.
“Why is he doing this to us?” He said about Trump and high fuel prices.
Gust Wahl, 84, paid about $600 a month to heat his home in the woods outside the city last winter. He expects to pay more because boats loaded with expensive heating oil are arriving. This winter, he plans to use the wood stove he bought eight years ago and put away. Still, he fully supports the president, partly because, he said, Trump is giving his fair share to countries that are living outside the US.
“If I had my way, I would have given him a third term,” he said.
industry comeback
More than 700 miles to the north, in Piqua, workers are building the latest project on the North Slope, the center of the state’s oil industry.
A giant rig is drilling wells that will produce a total of 80,000 barrels a day later this year — and reverse Alaska’s declining crude oil production. The project is on state land and was given the green light by Spain’s Repsol and Australia’s Santos in 2022 under former President Joe Biden.
One of the first executive orders signed by Trump upon returning to office last year was aimed at boosting fossil-fuel production in Alaska. In May, Interior Secretary Doug Burgum traveled to Piqua to mark what he called the “Great Alaska Comeback” – a new era of increased crude oil production and low energy prices. He also visited the willows, Nearly $9 billion oil project by ConocoPhillips It is scheduled to enter production in 2029 and will produce 180,000 barrels of oil per day at its peak.
In May, the Arctic tundra around Pikka was bustling with activity. Outside the Aurora Hotel, one of the few accommodations available for oil workers north of the Arctic Circle, dozens of pickup trucks were wired to power lines to keep their batteries working in the bitter cold. Trucks hauled parts for drilling rigs on the gravel roads that run through Caribou.
For the fossil-fuel industry, the administration’s help couldn’t have come at a better time. producers are making deals Depleting reserves and lack of sweet spots in the contiguous US In recent years, oil discoveries in Alaska have whetted their appetite, but Biden earmarks millions of acres of land off limits to drillersEnraging the industry.
Trump has since removed many protections And the GOP-led Congress has mandated new lease sales. In the March auction, ConocoPhillips, Repsol, Shell, Exxon and others spent a record-setting $164 million on drilling rights in Alaska’s federal National Petroleum Reserve.
Oil production in Alaska could more than double to one million barrels a day as projected, said Bob Fryklund, a strategist at S&P Global Energy who advises oil and gas executives.
ConocoPhillips Alaska President Ereck Isakson said of the administration, “They have done a lot to help open up Alaska with respect to oil and gas exploration and development, and put it in a position where we are today, where it looks attractive to the industry.”
Repsol Chief Executive Josue John Imaz said he had dinner with Burgum in Anchorage last year and that Energy Secretary Chris Wright shared his cellphone number.
“You have a very close-knit administration in terms of supporting people and interacting with them,” he said.
The new projects should benefit Alaska’s state coffers and help stimulate its economy, although state-tax breaks and the fact that some of the planned development is on federal, not state, ownership will limit how much cash the land generates for the state. According to the Department of Revenue, Alaska is expected to generate $2.5 billion in petroleum revenues in 2035, about $620 million more than in 2025.
race hard
Trump’s pro-fossil fuel moves are generally popular in Alaska, where voters and politicians across the political spectrum support resource extraction.
Nevertheless, the state’s dependence on crude oil has declined since crude oil production reached 2 million barrels per day in the late 1980s. It still pays residents an annual dividend from its sovereign-wealth fund — eligible Alaskans got $1,000 in the 2025 cycle — but as oil revenues have declined, the state has cut payments, said Brett Watson, an energy economist at the University of Alaska.
Higher oil prices this year are expected to bring in about $793 million more to the state in 2025 than projected, Watson said, and he is using the windfall to close the budget gap. In the long term, Trump’s energy policies could translate into more oil revenue for Alaska, giving it more leeway to maintain a healthy dividend.
At the same time, the energy crisis now looming over dozens of communities is eroding his support in the deep red state and has become a central issue in the Senate race between Sullivan and Peltola. Democrats need to flip four seats to regain control, and Alaska, along with Iowa and Ohio, is now a top focus for the party.
Democrats have criticized incumbent Sullivan for promoting Trump’s Iran war effort and being out of touch as Alaskans pay more for fuel. In an interview in May, Sullivan defended Trump’s goals in Iran and said the solution to rural Alaska’s energy problems was to produce more energy in the state. Some rural residents who voted for Sullivan said they would do so again this year.
Peltola’s campaign has moved away from taking direct aim at Sullivan or Trump, who won the state by 13 percentage points in 2024. She has been a supporter of new oil and gas projects, and has vowed to reduce the costs of gas, groceries, and housing.
Justin Askok, a fuel distributor in the village of New Stuyahoc, about 60 miles above Dillingham, said he didn’t vote for Trump or Kamala Harris in 2024, but he’s considering voting for Peltola. He said he is deeply concerned about the energy situation in his village, where he currently sells gasoline at $10 a gallon.
“Everything we buy is doubled,” he said, “and it comes straight to one place, one administration.”
Write to Benoit Morane here benoit.morenne@wsj.com
