Phillips 66 Closure Drives 40% Spike in California Gasoline Imports
Phillips 66 shuttered its Los Angeles refinery in October, contributing to a record 40% of California’s gasoline imports flowing through the Bahamas in November. The closure caps capacity and forces higher-cost circuitous shipping that could widen refining margins but also squeeze returns on West Coast operations.
1. Phillips 66 Los Angeles Refinery Closure
In October, Phillips 66 shut its Los Angeles refinery, eliminating a key source of West Coast gasoline supply and tightening regional refining capacity. This move removed hundreds of thousands of barrels per day from domestic output and heightened dependence on imported fuel.
2. Record Surge in California Gasoline Imports
In November, California’s gasoline imports reached their highest level since at least 2016, with over 40% of volumes routed through the Bahamas. The surge reflects the gap left by the shuttered refinery and the absence of direct pipelines from the Gulf Coast.
3. Shipping Costs and Margin Impact
Under the Jones Act, domestic shipping mandates force higher-cost US-flagged vessels, so suppliers reroute via foreign tankers through the Bahamas, adding distance and expense. The extended logistics may boost Gulf Coast refiners’ margins when West Coast prices trade at a premium, while pressuring Phillips 66’s regional returns.