Full Breakdown
California's Gasoline Supply Crisis: The Bahamas Trade Route
2/16/2026, 5:50:26 AM
The Shift in Gasoline Supply
California is experiencing a significant gasoline supply crisis, characterized by an increasing reliance on imported gasoline from the Bahamas. In November 2025, California imported more gasoline than ever before, with over 40% of these shipments originating from the Bahamas. This trend is driven by a combination of declining local refinery capacity, high fuel prices, and regulatory challenges, including the Jones Act, which mandates that goods shipped between U.S. ports must be transported on U.S.-built and operated vessels.
Factors Contributing to the Crisis
The state's gasoline supply issues are exacerbated by the closure of several oil refineries. Following the shutdown of the Phillips 66 refinery in Los Angeles in October 2025, gasoline imports surged to their highest levels since at least 2016. Valero Energy Corp. is also set to close a Northern California refinery, further straining local supply. Patrick De Haan, head of petroleum analysis at GasBuddy, estimates that these closures could increase gasoline prices for consumers by 5 to 15 cents per gallon.
The lack of interstate pipelines connecting California to the Gulf Coast, a major oil-producing region, compounds the problem. As a result, California's gasoline market has become increasingly dependent on imports to meet demand.
The Role of the Bahamas in Gasoline Imports
The Bahamas has emerged as a key supplier of gasoline to California, accounting for approximately 12% of the state's gasoline imports in 2025. This trade route allows Gulf Coast refiners to avoid the higher costs associated with U.S.-flagged shipping vessels. The economic viability of this route has been bolstered by the recent easing of sanctions on Venezuela, which has led to rising freight prices for foreign ships. However, the cost advantage of using foreign vessels has diminished, with the price difference narrowing from nearly $4 per barrel to just $1.
Two notable shipments from the Bahamas to California in early 2026 included nearly 300,000 barrels of gasoline blendstock delivered by the Singapore-flagged Silver Moon and another shipment by the Torm Dulce to San Francisco. These deliveries highlight the growing trend of routing gasoline through the Bahamas as a workaround to the limitations imposed by the Jones Act.
Criticism and Future Implications
Critics argue that California's reliance on imported gasoline, particularly from the Bahamas, reflects deeper systemic issues within the state's energy infrastructure. The ongoing refinery closures and the state's stringent environmental regulations have prompted calls for a reevaluation of energy policies to ensure a more stable supply chain.
Experts predict that this trend of importing gasoline via the Bahamas will continue as California grapples with its supply challenges. The situation underscores the need for strategic planning to address the state's energy needs while balancing environmental concerns.
Verbatim Quotes
“It makes sense that this is increasingly happening to the US West Coast given refinery retirements and outages — and is a trend we expect to persist.” — Patrick De Haan, Head of Petroleum Analysis, GasBuddy.
