27/04/26
California fuel imports soar after refinery closures
Houston, 27 April (Argus) — California has become increasingly dependent on fuel
imports following the closure of two large refineries, making it particularly
vulnerable to supply shortages related to the war in the Middle East. Refiner
Phillips 66 and midstream giant Kinder Morgan are developing a midstream project
that could provide some relief, but the plan will take years. In the meantime,
the state's gasoline and jet fuel prices have reached multi-year highs, boosted
by supply concerns, even as imports have soared. California has lost about 17pc
of its refining capacity in the past seven months following the closure of
Phillips 66's 139,000 b/d Los Angeles and Valero's 145,000 b/d Benicia
complexes. Total imports of refined products to the western US rose to nearly
345,000 b/d on 1 January-10 April, up by 38pc from the same period last year,
according to weekly data estimates from the Energy Information Administration.
California gasoline imports rose to 122,000 b/d in February, as the Benicia
plant started to shut down, according to trade analytics platform Kpler. That
was up from 28,000 b/d in January and 8,000 b/d higher on the same month last
year. Import dependence persisted in March, with gasoline arrivals of 142,000
b/d, nearly three times higher than a year earlier. Tightening regional supply
and higher underlying Nymex Rbob values as a result of the war in the Middle
East pushed prices higher. Los Angeles regular Carbob differentials rose to a
five-month high of 60¢/USG on 21 April, up by 41.25¢/USG from pre-war levels.
San Francisco regular Carbob differentials rose to 66¢/USG on 21 April, up by
41.5¢/USG from before the war began. Outright regular Carbob prices on 21 April
were $3.81/USG in Los Angeles and $3.79/USG in San Francisco, up from $2.47/USG
and $2.53/USG, respectively, on 27 February, before the war started. At the same
time, in-state Carbob production dipped in mid-April, further exacerbating
supply constraints. California refiners cut the production of Carbob gasoline by
13pc to 570,000 b/d, the lowest in at least five years, as their priority
shifted to producing in-state Carb diesel, according to the latest California
Energy Commission data. Prices are likely to remain supported in the near term
as geopolitical tensions have started to constrain inflows. Jet fuel woes Jet
fuel prices on the US west coast reached an all-time high of $4.92/USG on 23
April, up from a previous high of $4.81/USG on 20 March, according to Argus
data. California jet fuel stocks were at a more than two-year low as of 10
April, recent state data show. And South Korea — the state's main supplier of
jet fuel — relies heavily on the Middle East for its crude and naphtha supplies
and has taken measures to maintain local inventories, including export caps on
refined products. Californian jet fuel arrivals from South Korea have averaged
about 38,000 b/d in April, roughly even with March but down from 46,000 b/d, on
average, in January-February, Vortexa data show. In the longer term, the
Phillips 66-Kinder Morgan project, dubbed Western Gateway, could curb the need
for fuel imports. The companies say they are advancing the project after
securing shipper commitments. The plan includes a new 200,000 b/d pipeline from
Borger, Texas, to Phoenix, Arizona, combined with the reversal of Kinder
Morgan's existing SFPP pipeline from Colton, California, to Phoenix, Arizona. It
includes destinations west of Colton, allowing access to Los Angeles markets.
The companies expect the project to start up in 2029. By Eunice Bridges and John
Huber Send comments and request more information at feedback@argusmedia.com
Copyright © 2026. Argus Media group . All rights reserved.
