California faces potential fuel shortages and higher gasoline prices following the halt of Middle East crude oil shipments. The state's market remains isolated from other U.S. refining hubs due to a lack of pipelines. Foreign oil previously accounted for 30% of California's supply. The final tanker from the Persian Gulf has arrived, leaving the state to find alternative crude sources.
Local production declines and refinery closures further strain the state's energy infrastructure. Phillips 66 and Valero plan to shutter major facilities, reducing California's refining capacity by nearly 20%. These closures increase reliance on expensive gasoline imports and exposure to global price volatility. California currently maintains the highest fuel costs in the United States.