The state treasury is flush with oil revenue. Not because of investment in new production in Alaska — though that certainly is underway — but because the U.S. war with Iran is driving up oil prices faster and higher than drivers can afford.

The average for a gallon of diesel in the U.S. drove past $6 last week, speeding to a record high. The average price for gasoline was $4.31 a gallon on Sept. 13, up $1.13 from a year ago, according to AAA, the country’s largest motoring and leisure travel membership organization.

Those prices are bad news from coast to coast, particularly for shippers and consumers who will pay the high cost of fuel to power planes, trains and automobiles, and certainly trucks too.

It’s even worse economic news for residents in Alaska’s remote coastal communities who will pay painfully high bills when barges deliver their fuel for the winter. Those prices could make $6 diesel look like a bargain.

It’s because a barrel of crude, which last week closed at above $100, is at its highest in more than four years, when Russia’s unprovoked invasion of Ukraine briefly pushed global oil past $120 a barrel.

The closure of Middle East shipping lanes has reduced the global supply of oil and refined fuels by millions of barrels a day. And while demand is down significantly — people and businesses just can’t afford to use as much — supply is down more, creating the fear of shortages, which drives up prices.

All of which means more money for oil-producing nations and states outside of the Middle East. Like Alaska. 

The Legislature built a spending plan for this budget year, which started on July 1, on Alaska North Slope oil selling at $75 a barrel. The Department of Revenue reports it averaged $84 a barrel in July and August. It was at $107 on Sept. 10.

Expensive crude means the state treasury took in about $500 million more last fiscal year than it had expected in the spring. And it means even more extra money this year. A lot more.

The state will earn about $110,000 every day for every dollar a barrel of oil sells for more than the $75 estimate used for this year’s budget. Do the math and you get a lot of millions. At an $84 average over the entire year, that’s close to $400 million. At $90, it’s about $600 million.

Alaska and Alaskans can’t do anything about crude oil prices or diesel at the pump. What the next governor and legislators can do is spend the money wisely on what the state and its residents need. Or save it for the next time oil prices drop.