Description
Key insights and conclusions from our analysis include:
| • | California faces a 115,000 bpd gasoline supply gap due to the scheduled shutdown of P66’s LA and Valero’s Benicia refineries by 2026 – roughly 17% of the state’s in-state supply. | |
| • | P66 Ferndale and HF Sinclair Anacortes refineries in the PNW are investing in tankage, blending systems, and logistics to serve California’s unique specifications. | |
| • | Despite upward trends in supply flows from Washington, the PNW’s ability to backfill the full shortfall is structurally limited by regional demand in Washington, Oregon, and British Columbia. | |
| • | Marine transport remains the most viable supply route from the PNW, but vessel size limits, tug availability, and infrastructure constraints limit scalability. | |
| • | Introducing a “regional western blend” gasoline specification could improve market fungibility, reduce price volatility, and enable more flexible sourcing from PNW refiners and international imports. | |
| • | Long-term CARBOB investments are risky amid California’s declining gasoline demand and increasingly stringent environmental regulations, calling for strategic planning and policy clarity. |
