The last California-bound oil tanker to pass through the Strait of Hormuz since the war began is unloading its valuable cargo at the Port of Long Beach – 2 million barrels of crude to be transformed into gasoline, jet fuel and diesel.
The new Corolla was loaded in Iraq on February 24 – just days before US and Israeli forces launched attacks on Iran, sparking turmoil in the region and triggering a double blockade of commercial shipping.
In two weeks, the Hong Kong-flagged tanker will be completely unloaded at the Marathon Petroleum Terminal and will again depart for distant waters. After that, California will have to figure out how to replace the roughly 200,000 barrels of oil per day that will no longer come from the Persian Gulf.
California’s own crude oil supply has been has been declining since the 1980sDue to the old fields and geology that makes drilling particularly expensive. The state’s gasoline refining capacity is also declining, increasing reliance on imports and highlighting California’s status as an isolated energy island without gas pipelines to bring supplies from other states.
Now, the end of the Middle East conflict is nowhere in sight and the average cost of California gasoline has also dropped As high as $6 per gallonSome lawmakers are warning of potential oil and gas shortages.
Oil deliveries to California have been relatively stable so far during the Iran War. State imports about 75% Its oil comes from foreign countries and Alaska. last year this brought into the mix Brazil, Iraq, Guyana, Canada, Ecuador, Argentina and Saudi Arabia are its top international suppliers, with about 30% coming from the Middle East.
In March and April, that mix didn’t change much, with California receiving about 21% and 14% of foreign oil from Iraq and Saudi Arabia, respectively, according to data analytics firm Kpler.
Shipments that left before Iran blocked the Strait of Hormuz in late February have been arriving one to two months apart, about the same time it takes a tanker to make the journey. But if the strait remains closed until May, “all bets are off,” said Ryan Cummings, chief of staff at the Stanford Institute for Economic Policymaking.
“Refineries have to get oil from somewhere else, and they’re struggling to find where to get the oil,” said Susan Bell, senior vice president of consulting firm Rystad Energy. “They don’t have a lot of options.”
It is too early to say how California refineries – the state’s main crude importer – plan to make up for the loss of Persian Gulf oil.
Refiners typically plan their sourcing about two months in advance, Bell said. But Chevron would not share its supply plans, calling them “material to our business.” And the state’s other top refiners did not respond to requests for comment.
Bell said refiners may be looking to import or already have plans to import more oil from countries where they already source crude, such as Ecuador and Canada’s west coast, where freight charges are lower due to shorter travel distances.
“They will certainly look to Brazil for medium grades,” Bell said, noting that the oil being lost is the heavy and medium grade crude preferred by most California refineries. “Guyana might be a little too light for them, but you know, a liquid barrel is a liquid barrel, so maybe they won’t fuss too much about the quality.”
Cummings said it’s possible that California refiners could get ahead of other countries competing over the same barrels for a while, but there’s still a long way to go. “We’re looking at a cumulative loss of 800 million to a billion barrels of production,” Cummings said. “It’s absolutely incredibly tight.”
Already, China, Thailand, South Korea, Pakistan and other countries Gasoline exports have been reduced or banned to protect domestic supplies due to oil shortages and rising costs, making it too expensive to produce.
Some lawmakers from California have been pound the alarm Regarding possible supply shortages of both oil and gas in the coming months. The California Energy Commission said it is “working closely with refiners” and “is aware that they are identifying and utilizing alternative routes and sources of crude oil.”
Spokeswoman Nikki Woodard said the agency is confident in the state’s oil supply outlook, which includes refinery stock And additional storage, for the next six weeks.
“We went into this with a pretty healthy roster, but they’re being whittled down, and that’s when it becomes really uncertain,” Cummings said.
Data about shipments already traveling on water can give a preview of what’s happening en route. Besides the new Corolla, a tanker that left Iraq a month before the war started has been docked in Long Beach since March, but nothing else is coming from the area. Saudi Arabia is able to bypass 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, but it is too early to see any increase in volumes compared to what is being lost.
Unlike fuel coming from Asia or the Middle East, cargo from Canada or Latin America “can still be loaded and discharged next week,” Smith said.
California also imports large amounts of gasoline, which has been rising sharply since the Valero Benicia refinery was idled in February and the Phillips 66 Wilmington refinery went offline in December. The PBF Martínez refinery, which was closed due to a fire in February 2025, has not yet come back online. Whereas in 2024 California imported about 10% of its gasoline, it now imports 20%.
California’s top gasoline suppliers by far are South Korea, the Bahamas and India. Like oil, shipments have been arriving through April, but that is sure to change.
South Korea has virtually suspended jet fuel shipments and cut exports of gasoline and diesel. India has increased export duty on finished fuel products and is also sending less out. “We’re seeing very little on the water heading to the West Coast,” Smith said.
The Bahamas, where gasoline is reshipped from the U.S. Gulf Coast, may see some reduction, but by how much remains to be seen. “There’s a big question mark about where gasoline will come from next,” Smith said.
The Energy Commission said the state is estimating liquid gasoline supplies to last through May. “We expect to see an increase in imports in June as the market adapts to the new supply reality as a result of the conflict in Iran,” Woodard said.
Jamie Lewis, oil analyst at global research and consulting firm Wood Mackenzie, said she would expect to see a sharp rise in prices before seeing any reduction in California.
Kate Gordon, who runs the economic policy nonprofit California Forward and was previously a climate adviser to the Biden and Newsom administrations, said the only way for California to reduce exposure to global oil price volatility is through strategies like investing in electric vehicles and infrastructure.
“Even in Texas, where they obviously have a huge amount of drilling and a lot of supply, prices are going up because sellers are selling to whoever is paying the most at the moment of the restrictions, and everyone is facing restrictions everywhere,” Gordon said. “The only way to become less dependent on this global system is to reduce the demand for oil.”
