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American "anti-overwork": Refinery Closures Lead to Rising Gasoline Prices

Plastmatch Insights Lab 2025-07-30 14:01:47

According to the U.S. Energy Information Administration (EIA)According to EIA data, within the next 12 months, California will lose 17% of its refining capacity due to the closure of two refineries. These two refineries are:

Phillips66（Phillips 66Located in the Los Angeles area.Wilmington Refinery（Wilmington), capacity139,000 barrels per day， Scheduled to close by the end of 2025.

ValeroValeroLocated in the Bay Area Benicia RefineryBenicia）Capacity145,000 barrels per day，Planned onProduction will cease in April 2026.

The closure of the aforementioned refinery continues the trend of a sustained decline in refining capacity on the West Coast, following Phillips.66's Rodeo RefineryRodeo) ceased its oil refining business early last year, Marathon Petroleum (Marathon's Martinez RefineryMartinez) has also beenThe two refineries that are about to close account for only a portion of the total capacity in the United States, even though they are closing in 2020.2%However, they have an impact onCalifornia production capacity 17%AndWest Coast PADD 5) CapacityOnce they are retired, the resulting supply gap will have a disproportionate impact on the entire West Coast region.

The retail price of gasoline in California is typically higher than the national average, one reason being the West Coast's distance from other U.S. refining centers.The logistical connections between the Gulf Coast and other regions are insufficient. Additionally, California's unique gasoline blend specification, CARBOB (ultra-low sulfur, specially formulated), can only be produced by refineries with the appropriate equipment. Therefore, Arizona, which also uses a special gasoline formula, and Nevada, which relies on fuel supplies from California refineries, may also be affected by the reduced supply in the region.

Except for PhillipsApart from producing some gasoline that meets California standards at its refinery in Washington state, the most likely alternative fuel source will be imports from Asia, particularly imports of aviation fuel and gasoline, as some refineries in India and South Korea are also capable of meeting these specifications.

As of the end of May 2025, data shows that the total gasoline imports on the West Coast (including finished gasoline and blending components) exceeded 210,000 barrels per day, setting a record for the four-week average level.DespiteIn June, these import volumes decreased, but after two refineries in California shut down next year, summer imports are bound to increase further.

Transporting petroleum products across the Pacific Ocean typically requires Transportation ，This means unexpected. Shortage may lead to Short-term surge.Based on the U.S. Energy Information Administration (EIA)EIA） It is expected thatThe year 2026，The West CoastRetail gasoline prices will be affected by production.The ability to close with a slight increase will contrast sharply with the price decline trend in other parts of the United States.Research from State University,“If there is a sudden disruption in the supply chain,California gas prices may soar to $8.43 in 2026. /Gallon，Compared to current4.79 /gallonThe foundation 75%。Since last year, the California government has implementedMinimum Inventory MethodRefineries are required to maintain minimum gasoline reserves to mitigate the risk of supply disruptions.。

Author: GaoxingSpecialized VisionSenior Market Analysis Expert

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American "anti-overwork": Refinery Closures Lead to Rising Gasoline Prices

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