Iran War | Political & Economic Impacts

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“… California’s own supply of crude oil has been declining since the 1980s, due to aging fields and a geology that makes drilling particularly costly. The state’s gasoline refining capacity is also falling off, increasing reliance on imports and highlighting California’s status as an isolated energy island without gas pipelines to bring in supply from other states.

Now, with the end of the Middle East conflict nowhere in sight and the average cost of California gasoline topping $6 per gallon, some lawmakers are warning of potential oil and gas shortages.

… Data about shipments already traveling on the water can give a preview for what’s en route. Besides the New Corolla, one tanker that left Iraq a month before the war began has been anchored off Long Beach since March, but nothing else from the region is coming. Saudi Arabia has been able to circumvent the Strait of Hormuz with shipments from the Red Sea, but none of those barrels are headed to the West Coast.

Matt Smith, an analyst at Kpler, said Argentina, Ecuador and Brazil already have some crude on the way, but its too early to see any scaling up of volumes to match those being lost.

Unlike fuel coming from Asia or the Middle East, cargoes from Canada or Latin America “could still load now and discharge next week,” said Smith.

California also imports gasoline in amounts that have been sharply increasing since the Valero Benecia refinery went idle in February and the Phillips 66 Wilmington refinery went offline in December. The PBF Martinez refinery, taken out by a fire in February 2025, has yet to come back online. While in 2024 California imported about 10% of its gasoline, it now imports 20%.…”
 
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