California’s fuel needs ‘left in the lurch’ by Iran war

{"text":[[{"start":16.59,"text":"California is confronting sky-high petrol prices and the threat of jet fuel shortages because of disruption caused by the Iran war, exposing US energy insecurity as the Strait of Hormuz remains closed."}],[{"start":31.82,"text":"The most populous US state is vulnerable to the turmoil in world energy markets because it relies on imports of refined products such as petrol and jet fuel from Asia after introducing ambitious plans to phase out fossil fuels and significantly reduce refining capacity in favour of renewables."}],[{"start":56.870000000000005,"text":"But as governments across Asia struggle to secure crude supplies and their refineries cut production because of the war with Iran, California is expected to come under increasing pressure to meet demand. "}],[{"start":70.17,"text":"Californians pay the most for petrol in the country, with a gallon averaging $5.88 — the highest level since the pandemic — compared to $4.01 in the rest of the US, according to the American Automobile Association."}],[{"start":null,"text":"

"}],[{"start":87.62,"text":"US oil major Chevron blamed the energy insecurity on the state’s aggressive regulation of oil producers and refiners. “California must consider declaring an energy emergency to free crude oil production and refining from red tape, over-regulation and crushing tax burdens,” it said."}],[{"start":106.9,"text":"“In some Asian countries they are refusing to export products, that’s creating this ongoing availability question,” the company added. "}],[{"start":117.4,"text":"California has long led the US in environmental policy. The state’s voters approved a petrol tax in 2017 to pay for transportation improvements. California also plans to phase out sales of new cars and trucks powered by the fuel by 2035."}],[{"start":137.20000000000002,"text":"Anthony Martinez, spokesperson for governor Gavin Newsom, said: “Repealing gas taxes wouldn’t lower prices at the pump — it would hand oil companies a massive tax break with no guarantee that a single cent would be passed on to drivers.”"}],[{"start":154.34000000000003,"text":"Imports to the US west coast last week fell 26 per cent compared to the previous seven days to 141,000 barrels a day, and were expected to decline a further 3 per cent in the week ending Friday, said a report by Argus Media last week. The agency also pointed to signs of cargoes diverting to Asia, where they were likely to sell for higher prices."}],[{"start":null,"text":""}],[{"start":182.84000000000003,"text":"California is isolated from the rest of US refining capacity. While three pipelines — Western Gateway, Sun Belt Connector and HF Sinclair — are planned to help transport more American refined products to the market, they are years away from completion."}],[{"start":202.22000000000003,"text":"The state is set to lose roughly 280,000b/d of refining capacity with the closure of sites operated by Phillips 66 and Valero, said Rob Wilson, chief operating officer at East Daley Analytics, an energy intelligence company. Combined with earlier conversions and shutdowns, California’s supply has been structurally reduced, he added."}],[{"start":null,"text":""}],[{"start":228.86,"text":"“This current geopolitical situation highlights how much of an island California is on; they are left in the lurch if they can’t get their product from Korea,” Wilson said. “I wouldn’t be surprised by prices of $7, $8, $9 per gallon.”"}],[{"start":246.65,"text":"The state’s supply shock comes as President Donald Trump has criticised countries that cannot secure jet fuel because of the closure of the Strait of Hormuz."}],[{"start":258.3,"text":"Trump wrote in a Truth Social post on Tuesday: “All of those countries . . . like the United Kingdom, which refused to get involved in the decapitation of Iran, I have a suggestion for you: Number 1, buy from the US, we have plenty, and Number 2, build up some delayed courage, go to the Strait, and just TAKE IT.”"}],[{"start":282.15000000000003,"text":"Taylor Rogers, White House spokesperson, said: “President Trump’s commonsense energy dominance agenda lowers prices and increases production; Gavin Newscum’s (sic) so-called ‘green energy’ policies drive prices up and stifles production.”"}],[{"start":null,"text":""}],[{"start":298.40000000000003,"text":"Newsom, who is widely expected to run for the Democratic presidential nomination in 2028, has placed the blame for high petrol prices squarely on Trump’s war on Iran."}],[{"start":311.44000000000005,"text":"“This is Trump’s gas tax,” he said in mid-March. “Donald Trump is the driver of these spikes in the cost of gas and oil not only in California but across the country.”"}],[{"start":323.77000000000004,"text":"According to the California Energy Commission, the state’s refiners are “maintaining supply” by sourcing imported crude and petrol from alternative routes to offset the impact of lost Middle East cargoes."}],[{"start":339.21000000000004,"text":"Analysts said California could benefit from the 60-day suspension of the Jones Act, a century-old law that mandates only American-made and flagged ships can carry goods between US ports, by cutting the cost of transporting oil from US producing states."}],[{"start":356.45000000000005,"text":"“For most of the country, it is going to have a minimal impact,” said Thomas Weinandy, principal research economist at Upside, a consumer savings service, who predicts the suspension of the Jones Act could cut costs by 10 cents per gallon. “It’s now much more beneficial for California to receive oil from Alaska than it was a month ago.”"}],[{"start":null,"text":""}],[{"start":381.08000000000004,"text":"California’s supply of jet fuel was hit last autumn after a massive fire at a Chevron refinery in El Segundo, close to Los Angeles International Airport. The refinery is the second largest in the state and produced about 285,000 barrels per day before the blaze. "}],[{"start":400.91,"text":"Stockpiles of jet fuel are healthy in California at the moment, said Paasha Mahdavi, a professor of energy and environmental politics at the University of California, Santa Barbara. “But that is soon going to turn once you are unable to get the inputs that you need to produce jet fuel given the shortages in the supply chain,” he said."}],[{"start":422.54,"text":"Additional reporting by James Politi in Washington "}],[{"start":434.45,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1775181593_2782.mp3"}