California’s Fuel Supply Strained by Rising Prices, Russian Oil Imports, and Refinery Closures
California drivers are facing high gasoline prices as the state navigates a complex energy landscape marked by dwindling refinery capacity, increased reliance on imported fuels – including those sourced from Russia – and disruptions to global oil supplies exacerbated by the ongoing Iran war. The average price on April 15 was 30 cents higher than a month earlier, according to the American Automobile Association.
Refinery Closures Contribute to Supply Concerns
California’s refining capacity has been shrinking, with the closure of the Phillips 66 Co. Refinery in Los Angeles last year and the impending idling of a Valero Energy Corp. Refinery in Benicia this month. Together, these facilities account for nearly a fifth of the state’s crude oil refining capacity. These closures are occurring as demand for refined fuel is in transition, with rising electric vehicle adoption and more efficient gasoline cars leading to a drop in overall gasoline consumption, excluding pandemic-related declines.
Increased Reliance on Imported Fuels, Including Russian Oil
To compensate for reduced domestic refining capacity, California is increasingly reliant on imported refined products. Amidst tightening global crude oil supplies due to the Iran war, a surprising source has emerged: fuel made from Russian crude oil is surging into the state. This influx of Russian oil is occurring despite concerns about financing Russia’s war with Ukraine.
Jet Fuel Demand Adds to the Pressure
The situation is further complicated by a surge in demand for jet fuel, which is straining California’s refineries. Refiners are maximizing jet fuel production at the expense of gasoline output. In April, refiners boosted production of CARB-diesel by 16,000 barrels per day and jet fuel by 20,000 barrels per day, although cutting CARB-gasoline output by 32,000 barrels per day. This shift in production priorities is exacerbating the gasoline shortage and driving up prices.
Global Disruptions and Price Increases
Disruptions in the Strait of Hormuz are amplifying pressures on the fuel market, pushing prices into uncharted territory. Gasoline prices have approached all-time highs, nearing $6 per gallon in some areas. The number of refineries in California has fallen from 23 in 2000 to just 11 in 2026.
Impact on Travel and Tourism
The fuel shortages and rising prices are impacting travel and tourism, with several US states, including California, Hawaii, Nevada, Florida, New York, experiencing significant disruptions.
California is in a challenging transition to a clean energy economy, and these current fuel supply issues highlight the complexities of balancing energy needs with environmental goals.