California may soon find itself competing fiercely with other states for oil resources, as a key lobbying group has warned that its imported oil supply is dwindling.
Jodie Muller, the CEO of the Western States Petroleum Association, highlighted that the limited oil shipments reaching California could force the state into a competitive scramble with the rest of the United States and international markets.
This situation arises after the last tanker destined for California from the Strait of Hormuz was unloaded at Long Beach. This shipment marks the final barrels from this vital Middle Eastern route until the conflict in Iran is resolved.
The state’s vulnerability to this crisis is exacerbated by its ongoing struggle with refineries and major gas companies, which has led California to become heavily dependent on foreign crude oil.
Muller explained to KCRA that this reliance places consumers in a precarious position, signaling potential price increases and the risk of shortages at the pump.
She remarked, “We will see continued pressure on price in an upward direction as supply comes down in the state, and consumers should be concerned.”
“The global disruption that we are seeing is really just exposing our system and showing how fragile it is because of the policies we’ve had over layered policies on top of each other.”
California’s fuel system has become increasingly vulnerable after multiple refineries announced shutdowns in recent months, following years of environmental regulations and political pressure aimed at reducing fossil fuel consumption in favor of renewable energy alternatives.
The Phillips 66 Wilmington/Los Angeles facility and the Valero Benicia plant shut down eliminating roughly 20% of the state’s total refining capacity.
Despite the push toward electric vehicles and clean energy mandates, the overwhelming majority of vehicles on California roads still rely on gasoline. State registration figures show nearly 90% of cars in the state continue to use traditional fuel.
As in-state refining capacity shrinks, California has leaned more heavily on overseas oil imports to meet demand. State figures indicate roughly 60% of California’s crude oil now originates from foreign suppliers.
A significant portion of those imports comes from countries in the Middle East and Asia, including Iraq and Saudi Arabia, with shipments passing through the strategically critical Strait of Hormuz before reaching the West Coast.
During a legislative hearing earlier this week, California energy officials told lawmakers the state currently has enough fuel reserves to meet demand for about six weeks if disruptions in the Strait of Hormuz continue. Beyond that timeframe, officials acknowledged the outlook becomes far less certain and could trigger major price spikes.
Muller declined to directly endorse the six-week estimate but agreed Californians should expect mounting pressure on supplies if conditions worsen.
When asked whether prices could rise another $1 or even $2 per gallon, Muller said she did not “have a crystal ball,” but emphasized the state’s dependence on outside fuel sources leaves consumers vulnerable.
California’s uniquely strict fuel requirements also complicate efforts to stabilize supply.
The state mandates a specialized gasoline blend designed to reduce pollution, but critics say the requirement limits where California can purchase fuel during shortages and drives up costs.
Lawmakers floated the idea during this week’s hearing of reevaluating the specialized blend requirement as one possible long-term solution to supply concerns.
“Our companies in state have already made those investments to make that gasoline,” Muller said, noting that changing the fuel formula would be complicated for refiners already operating under California’s existing standards.
Muller also argued state leaders should reconsider policies she says have made California increasingly hostile to oil producers and refiners.
She warned that continued regulations and political pressure could further weaken the state’s remaining refining infrastructure and force California to rely even more heavily on imports from foreign countries.
“When we see policies being proposed that will be detrimental to this industry, i don’ think they’re getting the message,” Muller said.
