Politics
Another refinery shuts down in California. What happens to gas prices?
California’s attempt to manage a smooth transition away from gasoline just got roughed up with this week’s decision by Phillips 66 to shutter its refinery in Wilmington next year, wiping out more than 8% of the state’s crude oil processing capacity.
The closure is likely to increase California’s already high prices at the gas pump, given that much of the replacement gasoline will be shipped in by ocean vessel, analysts say.
The price issue will be “most worrisome if we have some kind of disruption in the market” and the Phillips refinery’s not there to help with resupply, said Severin Borenstein, faculty director at UC Berkeley’s Energy Institute.
The planned shutdown, announced by Phillips 66 on Wednesday, came just days after Gov. Gavin Newsom signed a bill that could force the state’s refineries to store extra gasoline, a move intended to minimize price spikes, such as those that occurred in late 2022 and 2023.
A Phillips 66 spokesman said the decision is not related to that bill, but in a press release the company called “the long term sustainability” of the refinery “uncertain.” He told The Times that “the refinery had lower profitability compared to other assets in our portfolio.”
State Sen. Steve Bradford (D-Gardena), who represents the Wilmington-area district where the refinery is located, sees the planned closure as the culmination of “a death of 1,000 cuts” from California energy policy “that led us to where Phillips saw no real future.”
Not only will gasoline prices rise, he said, “but now we’ll have ships docked at our ports spewing pollution while they’re unloading gasoline from countries that don’t have the same environmental standards that we have.”
He laments the loss of up to 600 direct jobs at the refinery, 300 contractors, and an unknown number of ancillary jobs. The Phillips refinery is split into two sites, one section in Wilmington and the other in nearby Carson, linked by pipeline.
“I feel for the men and women who live around that area who have depended on these jobs for decades. The refinery was there first, not the homes,” he said. “These people made a conscious decision to buy homes in these communities to be close to jobs.”
Environmentalists and community activists cheered the news, however, saying it will mean cleaner air for the thousands who live in the area and that the state must continue the transition away from its dependence on fossil fuels.
Jamie Court, president of Consumer Watchdog, acknowledged that gasoline prices could rise after the refinery is shut down, but said that justifies California’s plans to assert more control over gasoline supplies.
“This is the reason for command and control over the refiners,” he said. “So when one changes their plan, the others must make sure they have supply liquidity.”
The loss of the Wilmington refinery will consolidate the state’s refining capacity in fewer hands, in what Court said would raise the potential for price-fixing.
The refinery closure is the latest development in the state’s attempt to rid itself of gasoline and diesel vehicles to reduce pollution and greenhouse gases, but at the same time keep a lid on pump prices.
The governor has not been shy about blaming the industry for what he calls price gouging, and his rhetoric is heated. Earlier this week he posted an Instagram video in which he declares that “Big oil big wigs are up to their oily shenanigans here in California.”
Rather than go tit-for-tat with the governor, Phillips 66 is taking what might be considered a strategic retreat. The closure could indeed boost its bottom line. The company runs nine gasoline refineries in the United States and two in Europe. In an August presentation aimed at investors, the company said it planned to increase its capacity utilization. That can be accomplished by closing one or more refineries and increasing utilization at those that remain, cutting operating and capital costs and improving profit margins.
As to possible supply shortages, Phillips said it will “work with California to maintain current levels and potentially increase supplies.” No details were offered. Phillips has a strong incentive to keep supplies up: it runs about 1,000 service stations in California under the 76, Phillips 66 and Conoco brands.
But importing fuel by ship from its own refineries or buying it from other importers “adds costs,” Borenstein said.
State Sen. Steve Bradford (D-Gardena) represents the district where the Phillips 66 refinery is located. “I feel for the men and women who live around that area who have depended on those jobs for decades,” he said.
(Associated Press)
Newsom declined to comment. Siva Gunda, vice chair of the California Energy Commission, issued a statement saying Phillips 66’s “plan to replace the production lost from the refinery closure is an example of the type of creative solutions that are needed as we transition away from fossil fuels.”
California had 11 gasoline refineries but that number was cut to nine recently when the Marathon refinery in Martinez and Phillips 66’s other California refinery in Rodeo, both in Northern California, converted their plants from fossil fuels to renewable diesel fuel. Those conversions earn carbon credit subsidies in the state’s carbon markets.
While providing lower-carbon fuel to California truckers, with consequent reductions in pollution and greenhouse gases, the shift increased concentration in the gasoline-refining market, leading to more pricing power. Next year, the number of California refineries will shrink to eight.
While Phillips 66 said its decision isn’t related to the gasoline storage bill, it warned in its most recent annual 10-K financial report that California legislation and rulemaking could have “potential adverse effects on our refining, marketing and midstream operations in California, which may be material to our results of operations, financial condition, profitability and cash flows.”
The report cited the passage in 2023 of a bill that gives the state power to set limits on refinery profit margins, with heavy penalties for noncompliance. The state hasn’t yet exercised that option.
U.S. military forces stopped and boarded a second sanctioned tanker carrying oil from Iran in the Indian Ocean, the Pentagon said on Thursday, ramping up pressure on Tehran as the Trump administration seeks to resume negotiations to end the war.
A naval boarding team roped down from hovering helicopters and fanned out on the vessel, the M/T Majestic X, according to a Pentagon statement that included a 17-second video of the operation.
The military said the boarding was part of a “global maritime enforcement to disrupt illicit networks and interdict vessels providing material support to Iran, wherever they operate.”
Earlier this week, Navy SEALS boarded another ship in the Indian Ocean, the M/T Tifani, after the Pentagon said it was carrying oil from Iran.
Navy destroyers are also shadowing several other Iranian vessels, including the Dorena and Sevin, which had left from the Iranian port of Chabahar before the U.S.-imposed blockade began on April 13, a U.S. military official said. The Navy is directing those ships to return to an Iranian port, the official said.
With the M/T Tifani and M/T Majestic X now at least temporarily in the custody of the military, a U.S. military official said it was up to the White House to decide what to do with the sanctioned vessels and their cargo. The administration previously seized several tankers carrying illicit oil from Venezuela after a U.S. commando raid there in January that seized Nicolás Maduro, the country’s president.
“International waters cannot be used as a shield by sanctioned actors,” the Pentagon said in its statement on Thursday, adding that the department would “continue to deny illicit actors and their vessels freedom of maneuver in the maritime domain.”
Gen. Dan Caine, the chairman of the Joint Chiefs of Staff, hinted last week that the U.S. military would likely commence boarding operations like the ones this week. He said that U.S. military commanders elsewhere in the world, and especially in the Indo-Pacific region, would “actively pursue any Iranian-flagged vessel or any vessel attempting to provide material support to Iran.”
The U.S. Navy has turned back at least 31 ships trying to enter or exit Iranian ports since an American blockade outside the contested Strait of Hormuz began about a week ago, U.S. Central Command said late Wednesday.
Last Sunday, a Navy destroyer disabled and seized the Touska, an Iranian cargo ship, after it tried to evade the blockade. It was the first time a vessel was reported to have tried to evade the U.S.-imposed blockade on any ship entering or exiting Iranian ports since it took effect last week.
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White House press secretary Karoline Leavitt explained why President Donald Trump does not consider Iran’s seizure of two ships in the Strait of Hormuz a violation of the ceasefire agreement.
Leavitt made the statement during an interview with Fox News’ Martha McCallum on Wednesday just hours after Iran captured the Greek and Mediterranean-flagged vessels.
“Does the seizure of two ships — as we said, they were Greek and Mediterranean-owned ships with cargo on them, and the reports are that Iran basically seized them and then moved them into Iranian waters. We don’t know what’s going to happen to these crews. We’re not sure where all of this is going. Does the president view that as a violation of the ceasefire?” McCallum asked.
“No, because these were not U.S. ships. These were not Israeli ships. These were two international vessels,” Leavitt responded.
US FORCES ATTEMPTING TO BOARD SANCTIONED RUSSIAN-FLAGGED OIL TANKER IN NORTH ATLANTIC, SOURCES SAY
Karoline Leavitt, White House press secretary, conducts a press briefing. (Tom Williams/CQ-Roll Call, Inc via Getty Images)
“And for the American media, who are sort of blowing this out of proportion to discredit the president’s facts that he has completely obliterated Iran’s conventional Navy, these two ships were taken by speedy gunboats. Iran has gone from having the most lethal Navy in the Middle East to now acting like a bunch of pirates. They don’t have control over the strait,” she continued.
“This is piracy that we are seeing on display. And the naval blockade that the United States has imposed continues to be incredibly effective. And, to be clear, the blockade is on ships going to and from Iranian ports. And the point of this is the economic leverage that we maintain over Iran now. While there’s a ceasefire with respect to the military and kinetic strikes, Operation Economic Fury continues, and the crux of that is this naval blockade,” she added.
The Iranian made ‘Seraj’ a high-speed missile-launching assault boat on display in Tehran on August 23, 2010, as Iran kicked off mass production of two high-speed missile-launching assault boats the ‘Seraj’ (Lamp) and ‘Zolfaqar’ (named after Shiite Imam Ali’s sword) speedboats which will be manufactured at the marine industries complex of the ministry of defense. (YALDA MOAIERY/AFP via Getty Images)
Iran’s Revolutionary Guard Corps said the vessels, identified as the MSC Francesca and the Epaminondas, were operating without proper authorization and had tampered with navigation systems, accusations that could not be independently verified. The ships had earlier reported coming under fire near the strait, underscoring the increasingly volatile conditions in one of the world’s most critical shipping lanes.
US ‘LOCKED AND LOADED’ TO DESTROY IRAN’S ‘CROWN JEWEL’ ‘IF WE WANT,’ TRUMP WARNS
The Guard attacked a third ship, identified as the Euphoria, which had become “stranded” on the Iranian coast, Iranian media reported. It did not seize that vessel.
Ships and tankers in the Strait of Hormuz off the coast of Musandam, Oman, April 18, 2026. (Reuters)
Both the U.S. and Iranian sides have targeted commercial and cargo vessels as part of a broader pressure campaign tied to stalled negotiations. U.S. forces have also moved to seize at least one Iranian-linked vessel in the region, with each side accusing the other of violating the terms of a fragile ceasefire.
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The Strait of Hormuz is a vital artery for global oil shipments, with roughly 20% of the world’s supply passing through it. Traffic has slowed dramatically as ships reroute or avoid the area amid gunfire, seizures and conflicting directives from both militaries.
Fox News’ Morgan Phillips contributed to this report.
WASHINGTON — Los Angeles Mayor Karen Bass and L.A. County Supervisor Kathryn Barger met privately with President Trump and administration officials Wednesday to press for federal support and yet-unpaid wildfire recovery funding as the region continues to rebuild from the 2025 fires.
“This afternoon we met with President Trump and Administration officials to advocate for families who lost everything,” Bass and Barger said in a statement. “We had a very positive discussion about FEMA and other rebuilding funds as well as the support of the President to continue joining us in pressuring the insurance companies to pay what they owe — and for the big banks to step up to ease the financial pressure on L.A. families.”
Barger said the two leaders had a “high-level discussion” with the president in the Oval Office, sharing stories about what fire survivors are experiencing day to day. She added that “we left details behind with the President,” but did not specify whether Trump made any funding or policy promises during the meeting.
“First and foremost, today’s meeting was to thank the President for his initial support of infusing federal resources to expedite debris removal, as well as his recent tweet about insurance companies, which have already proven fruitful,” she said in a statement provided to The Times.
Bass was similarly reserved about the discussions, telling reporters that “we will follow up with the details,” but signaled progress is being made on federal support.
“I think what’s important is that we certainly got the president’s support in terms of, you know, what is needed, and then the appropriate people were in the room for us to follow up. And that was Russ Vought, who is the head of the Office of Management and budget,” Bass told KNX on Wednesday.
The meeting comes on the heels of a yearlong standoff between California leaders and the Trump administration over wildfire recovery funding, disaster response and whether the federal government should have a say in local rebuilding permitting.
California leaders, led by Gov. Gavin Newsom, have accused the Trump administration of withholding billions in critical wildfire aid, prompting a lawsuit over stalled recovery funds. Officials allege political bias in the delay of billions of dollars from the Federal Emergency Management Agency.
Newsom visited Washington in December. When he made his rounds on Capitol Hill, he met with five lawmakers, including three who serve on the Senate and House appropriations committees, to renew calls for $33.9 billion in federal aid for Los Angeles County fire recovery.
But the governor said he was denied a meeting with FEMA and would not say whether he had attempted to meet with Trump to discuss the issue.
Bass, meanwhile, appears to have found a path to the president on a subject that has been paramount for her community.
The fruitful meeting comes after Trump lobbed insults at the mayor at a news conference earlier this year, where he called her “incompetent” for how she handled last year’s wildfire recovery efforts. He alleged that under Bass’ leadership, the city’s delay in issuing local building permits will take years when it should have taken “two or three days.”
California officials, including Newsom, have urged the Trump administration to send Congress a formal request for the $33.9 billion in recovery aid needed to rebuild homes, schools, utilities and other critical infrastructure destroyed or damaged when the fires tore through neighborhoods more than 15 months ago.
What Bass and Barger’s meeting with the president ultimately produces remains to be seen.
The billions in recovery aid have not yet materialized, but the meeting could potentially give those discussions new momentum.
The White House did not immediately respond to a request seeking comment about the meeting.
Earlier this month, Trump criticized insurance provider State Farm on Truth Social for its handling of the devastating Los Angeles County wildfires. He accused the insurance giant of abandoning its policyholders when tragedy struck.
“It was brought to my attention that the Insurance Companies, in particular, State Farm, have been absolutely horrible to people that have been paying them large Premiums for years, only to find that when tragedy struck, these horrendous Companies were not there to help!” Trump wrote.
But the rebuke didn’t come out of the blue. It stemmed from a controversial February visit to Los Angeles by Trump administration officials.
Trump tapped Environmental Protection Agency Administrator Lee Zeldin in an effort to strip California state and local governments of their authority to permit the rebuilding of homes destroyed in the Eaton and Palisades fires.
Within the week, Zeldin was in Los Angeles, bashing Newsom and Los Angeles officials at a roundtable with fire victims and reporters, saying that residents were suffering from “bureaucratic, red tape delays and incompetency” and that leadership was “denying them … the ability to rebuild their lives”.
During the trip, officials heard direct complaints from local leaders and fire victims about insurers being slow, restrictive and insufficient with their claim payouts.
After these meetings, Trump directed Zeldin to investigate the insurers’ responses. State Farm, facing roughly $7 billion in fire-related claims, is also under formal investigation by California’s insurance commissioner over its handling of the crisis.
Despite tensions with the administration, Bass and Barger appeared confident that progress was being made on the insurance and funding issues.
“Our job is to fight for our communities,” their joint statement concluded. “When it comes to this recovery, our federal partners are essential, and we are grateful for the support of the President.”
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