U.S. Government Directs Restart of California Oil Operations Amid Controversy

On March 13, 2026, U.S. Energy Secretary Chris Wright directed Sable Offshore Corp., a Texas-based oil and gas company, to restore operations at the Santa Ynez Unit and the Santa Ynez Pipeline System off the Southern California coast. This decision, made under the Defense Production Act, aims to address potential supply disruptions exacerbated by geopolitical tensions, particularly the ongoing war in Iran, which has affected oil imports through the Strait of Hormuz. The Santa Ynez facility has the capacity to produce approximately 50,000 barrels of oil per day, potentially replacing nearly 1.5 million barrels of foreign crude oil each month.

Trump Administration orders restart of oil operations in California to cut dependence on foreign crudeSOC Stock Jumps 9.86% to $18.49 After Hours as U.S. Orders Restart of California Oil OperationsThe HillGovernor Newsom condemns and vows to fight Trump for exploiting Iran war crisis of his own making to harm California’s coastlinePolitico

The Santa Ynez operations were halted following a significant oil spill in 2015, which resulted in extensive environmental damage. Since then, Sable Offshore has faced numerous regulatory hurdles and legal challenges, including criminal charges related to environmental violations. The federal government’s recent directive comes after President Donald Trump signed an executive order reversing a previous ban on offshore drilling, which had been enacted during former President Joe Biden's administration.

SOC Stock Jumps 9.86% to $18.49 After Hours as U.S. Orders Restart of California Oil OperationsCBS NewsPoliticoThe Hill

California Governor Gavin Newsom and Attorney General Rob Bonta have strongly opposed the federal directive, arguing that it undermines state regulatory authority. Newsom condemned the move as an illegal attempt to restart a pipeline facing multiple court orders and criminal charges. He stated, “California will not stand by while the Trump administration attempts to sacrifice our coastal communities, our environment, and our $51 billion coastal economy.” The state has already initiated legal action to challenge the federal government's jurisdiction over the pipeline system.

SOC Stock Jumps 9.86% to $18.49 After Hours as U.S. Orders Restart of California Oil Operations

Critics, including Newsom and Bonta, argue that the federal government’s actions prioritize oil production over environmental protections. Bonta emphasized that the pipeline's restart would not significantly lower gas prices, as oil prices are determined by the global market. He described the federal directive as a “brazen abuse of power” and vowed to explore all legal options to contest it.

SOC Stock Jumps 9.86% to $18.49 After Hours as U.S. Orders Restart of California Oil Operations

The Energy Department has framed the directive as a necessary step to bolster national security and reduce reliance on foreign oil. However, experts like Ryan Cummings from the Stanford Institute for Economic Policy Research caution that the additional oil supply from Sable Offshore will not substantially impact consumer prices in California. The state currently imports over 60% of its refined oil, much of which comes from overseas sources.

Trump Administration orders restart of oil operations in California to cut dependence on foreign crude

There is a notable discrepancy between state and federal perspectives regarding the legality and implications of the pipeline's restart. While the federal government asserts that the directive is essential for national security, California officials maintain that it violates state law and poses environmental risks. A California judge recently ruled that Sable Offshore requires state approval before resuming operations, highlighting ongoing legal complexities.

SOC Stock Jumps 9.86% to $18.49 After Hours as U.S. Orders Restart of California Oil Operations

The situation remains fluid as legal battles between California and the federal government are expected to intensify. The outcome of these disputes will likely determine the future of Sable Offshore’s operations and the broader debate over offshore drilling in California.

SOC Stock Jumps 9.86% to $18.49 After Hours as U.S. Orders Restart of California Oil Operations

• “The Trump Administration remains committed to putting all Americans and their energy security first,” — Chris Wright, U.S. Energy Secretary

CBS News

• “California will not stand by while the Trump administration attempts to sacrifice our coastal communities, our environment, and our $51 billion coastal economy.” — Gavin Newsom, Governor of California

CBS News

• “We will not stand by as this administration continues their unlawful all-out assault on California and our coastlines, and we are reviewing all of our legal options,” — Rob Bonta, California Attorney General

The Hill